KB HOME
For the period ended Nov 30, 2025. Filed Jan 23, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Jan 23, 2026
KBH$50.70-2.6%Stored close · as of Nov 6, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-K
Period ended 2024-11-30; filed 2025-01-24.
0000795266-25-000014
Item 1A. Risk FactorsCurrent report: 10-K
Period ended 2025-11-30; filed 2026-01-23.
0000795266-26-000017
Item 1A. Risk FactorsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 459 previous paragraphs and 474 current paragraphs.
192 unchanged; 159 reworded; 120 added; 103 removed; 5 previous and 3 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (120)
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concentrated in a few business sectors outside of housing; sustained elevated mortgage interest rates and inflation; high
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consumer debt levels; and other macroeconomic and geopolitical concerns, such as the military conflict in Ukraine,
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lingering economic and financial market impacts from the prolonged shutdown of the federal government’s operations
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in October and November 2025, which may be compounded if Congress cannot agree on, or the President does not
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approve, a budget to fully fund the government beyond January 30, 2026, as well as the delay or cancellation of
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federal funding to certain states, particularly California. Among other impacts, a severe or sustained economic
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contraction may negatively impact housing demand, exacerbate ongoing housing affordability challenges, decrease
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traffic at our communities and/or trigger a rise in home sales contract cancellations, resulting in fewer net orders as
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selling prices or offer other concessions (such as mortgage interest rate buydowns) to attract or retain buyers. Since
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mid-February 2025, we have focused on delivering the most compelling value to our buyers through pricing
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transparency and a simplified sales approach to help stimulate demand. We both reduced selling prices relative to
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applicable market conditions and lowered or eliminated other homebuyer concessions. While we believe this approach
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drove higher traffic to our communities and stabilized demand after its implementation relative to the start of our 2025
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prices and margins as in prior periods. Additionally, we can offer no assurance that our current pricing strategy, and
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any changes we may implement thereto, including whether we offer or increase any concessions to homebuyers, will
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improve or sustain demand relative to 2025 levels or our expectations for 2026 and beyond.
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through the 2025 first half, the 2025 second half was marked by slower job and wage growth, as well as a gradual rise
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in the unemployment rate, which may be indicative of a cooling labor market. An increase in unemployment levels, as
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well as buyers hesitating on making purchase decisions due to, among other things, tepid consumer confidence, may
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lead to an increase in loan delinquencies and foreclosures, more resale homes on the market and diminished demand
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long-term outlook for the housing market favorably, based largely on demographic trends and the continued
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undersupply of homes. However, if there is less population growth or demographic trends are not as positive as we
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demand for new homes, including our homes, could be below the long-term forecasts in our business plans and/or
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result in our not achieving the same or better growth and financial performance in 2026 and beyond as we did in prior
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•Lack of available affordable housing. Elevated mortgage loan interest rates in 2024 and 2025, and the extended
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undersupply of homes, among other factors, have strained housing affordability and raised demand for lower-priced
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homes. In response, we introduced smaller floor plans and offer attached homes, townhomes, and condominiums,
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especially in our in-fill communities, to provide more affordable options. However, continued affordability
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challenges, particularly among entry-level homebuyers who are our primary customers, may require us to lower selling
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prices or offer other concessions to generate net orders, potentially reducing our revenues and profit margins.
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across financial markets, persistent inflation, including for essential consumer expenses (e.g., food, gasoline,
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electricity, trash, water), and various other macroeconomic and geopolitical concerns have weighed on consumer
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2026, negatively impacting demand and potentially requiring us to lower selling prices or offer other concessions to
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mortgage interest rates began to moderate in the 2025 second half, if mortgage interest rates increase and/or become
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a home from us. Further, we cannot provide any assurance that any interest rate reduction(s) or other monetary policy
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changes will positively affect demand for homes or our results of operations.
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California and Florida during 2024 and was exacerbated by wildfires and various significant weather events in 2025,
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2021-2023 period, since mid-2024, the supply of resale properties available for sale has generally risen in our served
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markets, and there has been a higher supply of rental units in some of our served markets. This competitive
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elevated mortgage interest rates and inflation, and various other macroeconomic as well as geopolitical concerns, such
Previous report
as military conflicts in Ukraine and the Middle East, and the U.S. federal government’s financial and regulatory
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stability with the recent presidential election and change of administration. Among other impacts, a severe or
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sustained economic contraction may trigger a rise in home sales contract cancellations, which we and the
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homebuilding industry experienced in our 2022 second half and 2023 first quarter, resulting in significantly lower net
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reduce our home selling prices or offer other concessions to attract or retain buyers, which we did selectively in 2024
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and 2023 (particularly, mortgage-related concessions such as interest rate buydowns), and expect to continue doing in
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2025 to varying degrees, negatively affecting our revenues and margins and, to the extent the concessions we offer are
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prices, volatility across financial markets, persistent inflation and various other macroeconomic and geopolitical
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including due to the change in U.S. presidential administrations in January and potential attendant regulatory
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generally the case from mid-2020 to mid-2022, may be reluctant to move given the current higher interest rate levels.
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Beyond negatively impacting demand, these conditions may require us to continue providing, or to increase,
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exacerbated by the unprecedented wildfires in the Los Angeles County area in January 2025, they may not be able to
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or retain buyers. While the historically low level of resale home inventory reduced the competition from sellers of
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resale homes in 2023 and 2024, resale inventory levels rose in our served markets in the 2024 second half and we can
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volatility in buyer demand since 2022 increased competitive pressures for our business and is expected to continue into
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Reflecting the housing market slowdown in the 2022 second half and 2023 first quarter, we and other homebuilders
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reduced land acquisition spending during the period. With market conditions having improved since the 2023 first
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quarter, we and other homebuilders have measurably increased land investments, pressuring availability and pricing.
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Whether we increase, decrease or maintain our current pace of land spend, we expect to continue to face competition
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source materials and services to build homes. However, our industry and the U.S. economy have experienced since
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mid-2020 labor shortages, supply chain constraints and rising and volatile raw material prices and availability, as well
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as delays with respect to state and municipal construction permitting, inspections and utility processes. Such
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satisfaction. These trends could continue into 2025. In an effort to manage our build times and deliver homes to our
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challenging conditions may persist to a certain degree into and potentially throughout 2025, as discussed below under
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Loan will mature on August 25, 2026 or earlier under certain circumstances. The Credit Facility will mature on
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uncertain as of the date of this report, given the scope of the unprecedented wildfires in the Los Angeles County area
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in January 2025, we expect the recovery efforts to create some of these types of disruptions in the Southern California
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•Trade disputes and defective materials. The federal government has imposed, and may in the future impose, new or
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increased import tariffs or sanctions, and other countries have implemented retaliatory measures, raising the cost and
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reducing the supply of several home construction items. For example, the U.S., European Union and other countries
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have imposed wide-ranging sanctions on Russian business sectors, financial organizations, individuals and raw
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materials due to the military conflict in Ukraine that, in combination with restrictions caused by the hostilities,
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contributed to higher costs and shortages of building materials. Military conflicts and other attacks in the Middle East
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region, including in or near shipping channels, may have a similar impact on the cost and availability of raw or
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finished building materials and components. Further, the new U.S. presidential administration has promoted plans to
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Reworded paragraphs (159)
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be caused or worsened by factors outside of our control, including slow or negative economic growth, sustained
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be caused or worsened by factors outside of our control, including slow or negative economic growth, or growth
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orders as compared to corresponding year-earlier periods. In addition, these conditions, along with heightened
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compared to corresponding year-earlier periods. In addition, these conditions, along with heightened competition from
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competition from other homebuilders and sellers and landlords of existing homes, as discussed below, may lead us to
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other homebuilders and sellers and landlords of existing homes, as discussed below, may lead us to reduce our home
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not sufficient to attract and retain buyers, our net orders. An extended downturn in the U.S. housing market could
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fiscal year, an extended downturn in the U.S. housing market could result in an oversupply of new home and resale
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result in an oversupply of new home and resale inventory and greater foreclosure activity, which would further impair
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inventory and greater foreclosure activity, which would further impair our ability to sell homes at the same volume,
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•Reduced employment levels and job and wage growth. While employment has mostly grown since mid-2020, it may
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•Reduced employment levels and job and wage growth. While unemployment rates remained steady in 2024 and
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rise more slowly or decline in 2025. If it does, our core first-time and first move-up homebuyer segments could be
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for new homes, including our homes. If it does, our core first-time and first move-up homebuyer segments could be
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•Lower population growth, household formations or other unfavorable demographic changes. These may be driven by,
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•Lower population growth, household formations or other unfavorable demographic changes. We continue to view the
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among other things, birth rate changes, economic factors or U.S. immigration policies.
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expect, potentially driven by, among other things, birth rate changes, economic factors or U.S. immigration policies,
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uncertainty. The combination of elevated mortgage interest rates since early 2022, several years of rising housing
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uncertainty. The combination of elevated mortgage interest rates, several years of rising housing prices, volatility
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concerns have weighed on consumer budgets and confidence throughout 2024 and may continue to do so in 2025,
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budgets and confidence throughout 2024 and 2025 and may continue to do so in 2026. In addition, homeowners who
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instability. In addition, homeowners who purchased their home with a relatively low mortgage interest rate, as was
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purchased their home with a relatively low mortgage interest rate may be reluctant to move given the current higher
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With housing affordability at historically low levels, these conditions are expected to remain, and may worsen, in
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interest rate levels. With strained housing affordability, these conditions are expected to remain, and may worsen, in
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concessions like those described above to stimulate net orders, adversely affecting our revenues and margins.
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stimulate net orders, adversely affecting our revenues and margins.
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known as Fannie Mae) and the Federal Home Loan Mortgage Corporation (also known as Freddie Mac). If mortgage
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known as Fannie Mae) and the Federal Home Loan Mortgage Corporation (also known as Freddie Mac). While
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interest rates increase, credit standards are tightened, appraisals for our homes are lowered or mortgage loan programs
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more volatile, credit standards are tightened, appraisals for our homes are lowered or mortgage loan programs are
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are curtailed, potential buyers of our homes may not be able to obtain necessary mortgage financing to be able to
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curtailed, potential buyers of our homes may not be able to obtain necessary mortgage financing to be able to purchase
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flooding or other natural disasters, such as in California and Florida. If potential homebuyers are unable to obtain
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flooding or other natural disasters, such as in California, Florida and certain Texas markets. If potential homebuyers
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affordable homeowner insurance coverage, which became more widespread during 2024 and is expected to be
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are unable to obtain affordable homeowner insurance coverage, a challenge which became more widespread in
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or decide not to pursue purchasing a home or may cancel a home sales contract with us.
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they may not be able to or decide not to pursue purchasing a home or may cancel a home sales contract with us.
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other housing industry participants, including single-family and other rental-housing operators. This competitive
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other housing industry participants, including single-family and other rental-housing operators. Relative to the
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lending markets and may increase our financing costs, as borrowings, if any, under our unsecured revolving credit
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lending markets and may increase our financing costs, as borrowings, if any, under our new, larger unsecured
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facility with various banks (“Credit Facility”) and our senior unsecured term loan with the lenders party thereto (“Term
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revolving credit facility with various banks (“Credit Facility”) and our recently amended senior unsecured term loan
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Loan”) typically accrue interest at a variable rate based on short-term Secured Overnight Financing Rate (“SOFR”).
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with the lenders party thereto (“Term Loan”) typically accrue interest at a variable rate based on short-term Secured
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While we attempt to pass on increases in our costs through increased selling prices, including for design choices and
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Overnight Financing Rate (“SOFR”). While we attempt to pass on increases in our costs through increased selling
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options, market forces and buyer affordability constraints can limit our ability to do so. If we are unable to raise
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prices, including for design choices and options, market forces and buyer affordability constraints can limit our ability
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selling prices enough to compensate for higher costs, or our borrowing costs increase significantly, our revenues,
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to do so. If we are unable to raise selling prices enough to compensate for higher costs, or our borrowing costs
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housing gross profit margin and net income could be adversely affected.
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increase significantly, our revenues, housing gross profit margin and net income could be adversely affected.
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community count, operational scale and market share, and to grow our business, if at all:
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community count, operational scale and market share, optimize returns on each of our assets, and grow our business, if at all:
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•Lack of available land. Securing sufficient developable land that meets our investment return standards is critical for
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and population growth prospects, that meets our investment return standards is critical for us to meet our strategic
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us to meet our strategic goals and profitably expand our business’ scale. Land availability depends on several factors,
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goals and profitably expand our business’ scale. Land availability depends on several factors, including geographical/
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including geographical/topographical/governmental constraints, sellers’ business relationships and reputation within
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topographical/governmental constraints, sellers’ business relationships and reputation within the residential real estate
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the residential real estate community, and competition from other parties, some of which can bid more for land.
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community, and competition from other parties, some of which can bid more for land. Reflecting housing market
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for desirable land in our served markets in 2025 and beyond, limiting our ability to profitably develop communities
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for desirable land in our served markets in 2026 and beyond irrespective of whether we increase, decrease or maintain
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our current pace of land spend, which may limit our ability to profitably develop communities and sell homes on such
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•Supply chain and construction services shortages. Our business relies on a network of suppliers and trade partners to
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•Supply chain challenges. Our business relies on a network of suppliers and trade partners to source materials and
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constraints, cost pressures and delays have increased our costs, reduced our revenues in certain reporting periods,
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increased our input costs and reduced our revenues in certain reporting periods, and in some instances, led to home
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provide no assurance that this favorable factor will continue to the same degree, or at all, in 2025. In addition,
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we can provide no assurance that the delays we experienced in 2025 will improve to any degree, if at all, in 2026 or
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homebuyers, we, among other things, expanded our supplier base and added new construction service providers;
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relative to other new homebuilders, since 2020 we, among other things, have expanded our supplier base and added
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worked with our national suppliers to get products and materials; ordered items in advance of starting homes;
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new construction service providers; worked with our national suppliers to get products and materials; ordered items in
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features, amenities or appliances, particularly if home prices increase as a result.
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or capital resources could be adversely impacted.
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certain professional licenses, including building contractor and real estate brokerage licenses. Our home selling and
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our ability to sell homes at the same volume, prices and margins as in prior periods.
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particularly in 2022 and 2023, and in some instances, led to home sales contract cancellations or lower customer
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senior notes due June 15, 2027 (“6.875% Senior Notes due 2027”).
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historical events. In balancing these objectives, we may determine we need to absorb most or all the additional operating costs
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have sufficient licensed individuals in our workforce.