(Reuters) – U.S. homebuilder KB Home said on Wednesday net orders in the first two-and-a-half weeks of the ongoing second quarter fell 24% from last year, issuing a rare mid-quarter update due to the ongoing market volatility fueled by a banking crisis.
The California-based company expects net orders for the second quarter, which began in March, between 3,000 and 3,700, a 14% decline when compared with the midpoint of the range from a year earlier, when steady employment and wage growth were fueling housing demand.
“Interest rate and economic uncertainties posed a large risk to the near-term demand,” Chief Executive Officer Jeffrey Mezger said on a post-earnings call with analysts.
While the outlook for the housing market largely remained unclear, mortgage rates, which in February resumed their upward trend, are falling again in tandem with a sharp fall in U.S. Treasury yields after the recent turmoil in the banking sector sparked fears of contagion.
Interest rates on the most popular U.S. home loan tumbled by the most in four months last week after emergency measures taken to shore up the wider banking system drove a mad dash by investors to the safety of government bonds, the Mortgage Bankers Association said on Wednesday.
“The banking crisis could lead to a little bit of injection of life into the housing market by lowering mortgage rates,” said Lisa Sturtevant, chief economist at Bright MLS.
KB Home reported better-than-expected first-quarter revenue, sending its shares up by 3% after the bell.
(Reporting by Priyamvada C and Kannaki Deka in Bengaluru; Editing by Rashmi Aich)