KB Home Plunges 10.18% to Monthly Low on Weak 2026 Guidance, Housing Downturn

The share price fell to its lowest level so far this month, with an intraday decline of 10.18%.

KB Home’s recent selloff reflects a confluence of bearish factors, including weak 2026 guidance and deteriorating housing market fundamentals. The company projected 2026 housing revenues of $5.10–$6.10 billion, below 2025’s $6.21 billion, while Q1 2026 delivery forecasts of 2,300–2,500 homes lagged consensus expectations. Margins are also under pressure, with expected Q1 2026 gross profit margins of 15.4–16.0%, down from 17.8% in 2025, as pricing competition and elevated land costs erode profitability. A 9% year-over-year drop in Q4 2025 deliveries and a 7% decline in average selling prices to $465,600 further underscore waning demand amid high mortgage rates and affordability challenges.

Broader industry headwinds amplify the bearish outlook. KB Home’s backlog of 3,128 homes, valued at $1.40 billion, represents a sharp decline from 4,434 homes ($2.24 billion) in Q4 2024, signaling reduced future revenue visibility. Analysts have downgraded price targets, with RBC and Wolfe Research lowering expectations to $54 and $56, respectively. While the company returned $600 million to shareholders in 2025 and maintains a $900 million share repurchase authorization, market skepticism persists over its ability to offset macroeconomic pressures, including near-7% mortgage rates and industry-wide margin compression. Investors are now closely monitoring Q1 2026 order trends and cost-cutting initiatives to assess recovery potential.