KB Home says demographics are strong underpinnings for demand

CEO Jeffrey Mezger says: "The long-term outlook for the housing market remains favorable. As we have said in the past, the demographics of the millennials and Gen Zs are advantageous for our business as our primary buyer segments are first time and first move-up buyers. While these demographics are a strong underpinning for demand, we are also still facing low levels of inventory especially at our price points. Just yesterday, February resales were reported, representing the first sequential increase in activity in 13 months, leaving resale inventory levels at 2.6 months supply. At the same time, new home inventory continues to be limited. As to our orders, demand in the back half of our first quarter improved significantly with a sequential increase in net orders in both January and February… More stable mortgage rate environment during January and February, where rates have settled into a low to mid-6% range was also beneficial in moving potential homebuyers off the sidelines. Buyers seem to be acknowledging that these higher rates are the new normal as they return to the market." Comments taken from Q1 earnings conference call.