KB Home announced the grand opening of three new communities—Meridian and Solstice within the Compass Pointe master plan in Ontario, California, and Somerset in Victorville, California—on January 9 2026. The launch adds a total of 1,200 homes to the builder’s portfolio, with the Ontario projects offering up to five‑bedroom homes priced from the mid‑$760,000s and the Victorville community starting in the mid‑$400,000s.
The new homes feature modern kitchens, spacious backyards, and ENERGY STAR® certification, underscoring KB Home’s commitment to energy‑efficient construction. The communities are positioned near major highways and regional parks, providing residents with convenient access to transportation and outdoor recreation—an attractive selling point in a market where proximity to amenities drives demand.
KB Home’s expansion aligns with its broader strategy to increase the built‑to‑order (BTO) mix to 70% or more, a move designed to lift margins in a market where price pressure and rising land costs have compressed profitability. In Q4 2025, the company reported a 6.9% operating income margin—down from 11.5% a year earlier—while revenue fell 15% to $1.69 billion. The margin decline was driven by lower gross profit margins and higher land costs, but management highlighted that the BTO shift is expected to bottom out in Q1 2026 and improve thereafter.
CEO Jeffrey Mezger said the new communities “demonstrate our confidence in Southern California demand and reinforce our focus on high‑margin, customer‑centric homes.” He added that the BTO strategy, combined with energy‑efficient features, positions KB Home to capture a growing segment of buyers willing to pay a premium for customization and sustainability.
Analysts have adjusted their ratings in light of the company’s margin compression and the risks associated with accelerating the BTO mix. While the new community openings signal growth, the market remains cautious about the pace at which KB Home can convert the expanded inventory into profitable sales amid ongoing headwinds such as elevated mortgage rates and supply‑chain costs.
The launch of the Ontario and Victorville communities is expected to contribute to future revenue growth once the homes are sold, but the company’s near‑term focus remains on managing costs and improving margins. The BTO strategy, coupled with the energy‑efficient positioning of the new homes, is intended to offset the current margin squeeze and support a rebound in profitability as the builder scales its operations in high‑demand markets.
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