LOS ANGELES (AP) – KB Home reported Tuesday that its third-quarter net income grew more than eightfold as its interest expenses declined while it delivered more homes at higher prices.
President and CEO Jeffrey Mezger said in a statement that the recent slowdown in the housing market recovery caused by rising mortgage rates is temporary and that the homebuilder expects to see “steady upward demand” as consumers adjust to increased rates and higher home prices.
Homebuilders are a bellwether for the housing market and the economy. While new homes represent less than one-fifth of the total housing market, construction of houses has a major impact on the economy.
For the three ended Aug. 31, KB Home earned $27.3 million. That’s up sharply from $3.3 million in the prior-year period.
Interest expense fell to $11.3 million from $23.1 million in the quarter.
KB Home’s revenue increased 29 percent to $549 million from $424.5 million as the average selling price rose 22 percent. Wall Street predicted higher revenue of $568.2 million.
Home deliveries climbed 6 percent to 1,825 homes. This is the eighth straight quarterly increase for the Los Angeles company.
Potential future revenue in backlog climbed 9 percent to $808.5 million. The number of homes in backlog fell 3 percent to 3,039 homes most because of a 9 percent drop in quarterly net orders.
Earlier in the day, fellow homebuilder Lennar Corp. reported third-quarter results that topped analysts’ estimates as its home deliveries and new orders continued to climb.