KB Home (KBH) posted a smaller-than-expected third-quarter loss and said orders and backlog jumped, possibly signalling a turnaround for the battered home builder.
KB's loss widened to 13 cents a share from 2 cents, but that was still better than Wall Street predictions of 19 cents. Net orders leapt 40% to 1,838 homes, and backlog rose 22.5% to 2,657 homes.
Shares rose nearly 3% as of 12:43 p.m. ET, though they are still off about 60% since mid-January. Toll Brothers (TOL), Lennar (LEN) and DR Horton (DHI) were also rallying.
KB Home's third-quarter revenue dropped 27% to $367.3 million, missing views of $380.3 million. But the backlog of 2,657 homes represents future revenue of $559.3 million.
Orders rose in all its geographic regions, led by a 73% surge on the West Coast. The average selling price rose 6% to $227,400. The cancellation rate eased to 29% from 33%.
Falling mortgage rates could help home builders. The average 30-year fixed mortgage rate remained at a 60-year low this week at 4.09%, Freddie Mac said, helped by declining Treasury yields and the Federal Reserve's shift of its bond holdings to push down long-term borrowing costs.
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