Brutal. That's the best way to describe KB Home's fourth quarter, which saw its buyer cancellation rate spike to 68%. That figure dwarfed the publicly traded homebuilders' 13% cancellation rate from the previous year's period. It also surpassed the industry's peak cancellation rate of 47% during the darkest days of the 2008-era crash.
"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," KB Home told investors back in January after posting its disappointing fourth quarter result.
