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KB Home lifts gross margin as build-to-order mix rises
In Q3 2026, revenue fell 20% and deliveries dropped 19% to 2,732 homes even as gross margin climbed to 16.5% and the company cut Q4 guidance.
KB Home reported Q3 2026 revenue down 20% as deliveries fell 19% to 2,732 homes, and its average selling price slipped to $473,000 from $475,700 a year earlier, HousingWire reported. The builder also said homebuilding operating income fell nearly 50% versus the prior year.
HousingWire said build-to-order accounted for 74% of sales, up from earlier mix levels as KB Home rebalanced away from spec emphasis. That shift helped lift gross margin to 16.5% sequentially, up from 15.2% in Q2, despite the weaker top line.
Still, KB Home lowered its Q4 margin and sales price guidance, a move HousingWire said overshadowed the quarterly margin improvement and contributed to the stock decline on Wednesday. The outlet added that the company’s customers are largely first-time buyers and remain constrained by affordability and ongoing economic uncertainty.
HousingWire also noted that KB Home pointed to the same demand headwinds discussed by peers, including rising mortgage rates, high gas prices, persistent inflation, low consumer confidence, and geopolitical uncertainty. The company said sales weakened through the quarter, with June improving and July and August softer, alongside increased competition from the resale market.