In early January, KB Home said its fourth quarter buyer cancellation rate was a staggering 68%—far above the industry's peak of 47% during the darkest days of the 2008-era crash. KB Home CEO Jeffrey Mezger was clearly worried about the latest cancellation rate, telling investors at the time that "depending on market dynamics and backlog levels in each community, we are getting more aggressive with our pricing ahead of the spring selling season, in order to generate new orders."
Those "aggressive" incentives, coupled with house price cuts, seem to be working for the giant homebuilder: On Wednesday, KB Home reported a second quarter cancellation rate of 22%. While that's still a high share of buyers canceling their contracts with KB Home, it's far below what it had said in January and the 36% it had reported for Q1 2023.
