KB Home saw a 13 per cent increase in the value of its order book amid a stronger than expected quarter in the crucial spring season, raising hopes for a resurgent US housing market.

Chief executive Jeffrey Mezger said the Los Angeles-based homebuilder was “well positioned throughout this spring selling season”, citing the expansion of its community count and strong demand for its homes.

Mr Mezger added that a 17 per cent increase in KB Home’s average community count was its largest increase in four years.

KB Home delivered 2,768 homes during its second quarter that ended May 31, up 2 per cent year-over-year. That easily topped analysts’ forecast for sales to hit 2,468 units, according to Refinitiv. Average selling prices fell 8 per cent to $367,700, falling short of estimates, mainly due to a shift in geographic mix.

Net orders surprised to the upside, rising 15 per cent to 4,064 homes. The value of those orders climbed 13 per cent to $1.53bn.

Shares in KB Home rallied 5.1 per cent to $24.73 in after-hours trading.

Homebuilder stocks have taken a beating this week in reaction to data on Tuesday that signalled persistent weakness in the housing market. Home price growth continued to slow in April, and new-home sales hit a five-month low last month. A commerce department report last week showed that housing starts unexpectedly fell in May, although building permits — a gauge of future construction — ticked up 0.3 per cent month over month.

The figures bucked expectations that the sector would rebound against the backdrop of lower mortgage rates. Homebuilders have faced a shortage of land and rising costs for labour and materials, but they largely sounded an optimistic tone early this year as rates receded.

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Lennar, which reported stronger than expected earnings on Tuesday, noted that greater affordability helped bring buyers off the sidelines. However, the builder delivered a third-quarter outlook that fell short of Wall Street forecasts.

KB Home earned net income of $47.5m in the May quarter, or 51 cents a share, down from $57.3m, or 57 cents a share. Revenue was down 7 per cent to $1.02bn.

Analysts were looking for earnings per share of 40 cents on revenue of $936.4m.



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