KB Home exceeded the high end of the company’s guidance for several key metrics in the second quarter, headlined by 2% growth in net orders and 7% growth in net order value.

“Buyers remained resilient in their desire for homeownership despite the volatility in mortgage interest rates,” chairman and CEO Jeffrey Mezger said. “Our pace of monthly net orders per community was one of our highest second quarter levels in many years, which we believe reflected the compelling personalized choice that our Built to Order model offers to meet each buyer’s lifestyle and budget.”

Net orders increased to 3,997 homes in the quarter while KB Home delivered 3,523 homes in the second quarter, down from 3,666 in the prior-year period. Net order value grew to $2.03 billion, reflecting growth in net orders and a higher average selling price for orders. The average selling price increased to $483,000 in the quarter from $479,000 in the second quarter of 2023.

Monthly net orders per community increased to 5.5 from 5.2 while KB Home’s cancellation rate as a percentage of gross orders improved to 13% from 22%.

KB Home’s second quarter revenue declined by 3.3% to $1.71 billion while home building operating income fell 6.9% to $188.2 million. The builder reported profit of $168.4 million, or $2.15 per share, representing year over year growth of 2% and 11%, respectively.

“In the second quarter, we significantly increased our investment in land acquisition and development, repurchased additional shares, and raised our quarterly dividend,” Mezger said. “With healthy expansion in our owned and controlled lot count, as well as our planned community openings, we are confident we are well positioned for future growth.”

KB Home grew its investment in land and land development for the first six months of the year by 64% to $1.26 billion, compared to $763.2 million through the first six months of 2023. The builder’s lots owned or under contract grew 17% to 65,533, of which approximately 61% were owned. By comparison, 73% of KB Home’s total lots were owned as of Nov. 30.

KB Home ended the quarter with 6,270 homes in backlog representing a value of $3.12 billion, decreases of 14% and 10% on a year-over-year basis, respectively. The builder’s average community count for the quarter was down 4% to 243 on a year-over-year basis. Sequentially, community count grew by 4% compared to the first quarter.

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