How Does KB Home Company Work?

The KB Home process is largely defined by its 'Built to Order' (BTO) business model, which accounts for a substantial portion of its sales. This model empowers homebuyers by allowing them to select floor plans, lots, square footage, and finishes at the KB Home Design Studio. This level of personalization is a key differentiator, offering a unique customer experience.

KB Home manages a comprehensive supply chain that includes land acquisition, development, and construction. In 2024, the company invested over $2.8 billion in land, increasing its lots owned or under contract by 37% to 76,703. This strategic land investment supports future community growth, complemented by a balanced approach that includes speculative inventory for buyers seeking immediate occupancy.

KB Home is recognized as a leader in sustainability, being the number one energy-efficient national homebuilder. In 2024, it built its 200,000th ENERGY STAR certified home. Homes built in 2024 achieved an average Home Energy Rating System (HERS) Index score of 45, indicating they are 55% more energy efficient than a typical home built in 2006.

The company prioritizes strong customer relationships, being the number one customer-ranked national homebuilder on TrustBuilder for five consecutive years as of 2024. Operational efficiency is also a focus, with build times returning to pre-pandemic levels, averaging approximately 140 days in Q2 2025, a 20% year-over-year improvement.

KB Home has consistently led in energy efficiency, becoming the first national builder to offer WaterSense labeled homes in 2010. Their commitment is highlighted by building the 200,000th ENERGY STAR certified home by 2024, making them the top energy-efficient national homebuilder.

Despite market fluctuations, KB Home strategically expanded its community count by 7% and significantly increased land acquisition and development investments. In 2024, this investment exceeded $2.8 billion, a 58% rise from the previous year, with further increases planned for 2025 to fuel future growth.

KB Home's 'Built to Order' model is a key differentiator, allowing extensive personalization and minimizing inventory risk. This approach, combined with a focus on energy and water efficiency, lowers the total cost of homeownership for buyers.

The company maintains strong financial health, with $1.19 billion in liquidity as of May 31, 2025, and a reduced debt-to-capital ratio of 32.2% in Q2 2025. This stability supports continued investment and adaptation to market conditions, such as strategically timing new community openings.

KB Home is among the largest national homebuilders, operating across 49 markets. Its 'Built to Order' approach and focus on sustainability are key differentiators in a competitive landscape. The company consistently ranks high in customer satisfaction, underscoring its market presence.

The housing market faces challenges from elevated mortgage rates, averaging 6.7% in 2025, impacting affordability. Rising material costs, labor shortages, and potential geopolitical issues also pose risks. These factors are contributing to a softening demand, with single-family housing starts projected to decrease by approximately 3.0% in 2025.

KB Home is strategically managing its land portfolio, controlling 74,837 lots as of Q2 2025, providing about three years of supply. The company has adjusted its fiscal year 2025 housing revenue guidance to between $6.3 billion and $6.5 billion, with an anticipated 13,200 home deliveries. This reflects a strategic pivot towards reducing inventory risk by aiming for a 70-75% built-to-order mix.

The company plans aggressive share repurchases, targeting $200 million to $300 million in the latter half of 2025. Leadership remains focused on navigating market fluctuations while maintaining high customer satisfaction. The long-term view is optimistic, driven by a persistent undersupply of homes and favorable demographics, particularly in growth areas.