Homebuilder Stocks Face Long Recovery

KB Home(KBH Quote) excited investors with a lower-than-expected loss, but homebuilder stocks have a long way to go in their recovery.

KB Home cut its loss by 78% to $58.1 million, or 75 cents a share. Analysts polled by Thomson Reuters predicted an 81-cent loss. The company has $1.31 billion in cash to boot.

It seems like another reason to be optimistic about homebuilder stocks. But none of these small victories will be enough to counter months of falling prices and sales. February's sales were still down 41% from a year ago. Some could argue that the 20% drop in the median home price to $200,900 will encourage buying, but lower prices will also hurt builders' bottom lines. ...