I created the same chart for KB Homes of new home deliveries and backlog going back to 2003: KBH New Homes and Backlog Chart.
Basically, these builders are just trying to complete whatever they have orders for, complete and sell whatever they’ve gotten started on and not build anything new. They’re just retrenching, digging in and trying to weather the storm.
On that score, KB recently announced that they’ll be retiring $300 million in debt that wasn’t coming due until 2010 (KBH Press Release).
They’ve tried to call a bottom in the homebuilders a couple of times now. From July 2006 through January 2007 the S&P Homebuilders rallied about 33% and from this January through April it rallied about 67% (XHB 2+ Year Chart).
But the homebuilders won’t bottom, nor will the financials, until we start seeing some improvement in their fundamentals. And these results show that we’re still not there yet.
Disclosure: Top Gun has no position in Lennar (LEN), KB Homes (KHB) or the S&P Homebuilders ETF (XHB).