The company said fourth-quarter housing revenue will range from $1.31 billion to $1.34 billion, down from previous guidance of $1.39 billion to $1.45 billion, citing such issues as lower-than-usual deliveries in Texas, fewer-than-anticipated spec sales and deliveries, and potential delayed closings over the next few weeks in California due to wildfires.
KB Home also said it expects net orders for the first 10 weeks of the fourth quarter to be down 14% year over year. Analysts at Bank of America lowered their rating on KB Home from a "buy" rating to a "neutral" rating and several other analysts cut their price targets.
Other homebuilders were feeling the heat. Lennar Corp. (LEN) - Get Lennar Corporation Class A Report slipped 5.5%, Toll Brothers Inc. (TOL) - Get Toll Brothers, Inc. Report fell 5.2%, D.R. Horton Inc. (DHI) - Get D.R. Horton, Inc. Report was down 3.5%, and Beazer Homes USA Inc. (BZH) - Get Beazer Homes USA, Inc. Report was off by about 6.6%.
Also, on Thursday Freddie Mac reported that the 30-year fixed-rate mortgage averaged 4.94% for the week ended Nov. 15, unchanged from last week. The 15-year fixed-rate mortgage averaged 4.36%, up three basis points. The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.14%, also unchanged.