$4B homebuilder KB Home: We may have cut Florida home prices too much

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As ResiClub has closely documented, Florida has been the epicenter of U.S. housing market weakness in 2025.

However, KB Home executives now believe the worst may be behind them—at least for their business—in the Sunshine State.

While giant homebuilder KB Home—which has a $4.3 billion market capitalization—isn’t ready to call it an inflection point for the entire state, it believes its price cuts in Florida were more than sufficient to stabilize demand for its business. In fact, it may have cut too deeply in Florida and could now need to raise prices in some communities.

On the company’s September 24 earnings call, chief operating officer Rob McGibney said its business in Florida appears to be stabilizing after the builder moved aggressively to cut prices earlier this year. In fact, KB Home now thinks some of those cuts went too far.

“We’ve actually found, in some cases, we’ve gone above what we needed to [and cut home prices too much in Florida]. So, in order to optimize those assets, we’re now increasing [the] price,” McGibney said.

The executive added that KB Home’s new home sales in Florida in the third quarter were higher than in the second, a sign that the price adjustments worked to restore demand. He also pointed to a decline in housing starts across the state, which is easing pressure from supply.

”The good news for us is that [price cuts in Florida] worked, and now you’re seeing the orders come back up [in Florida] as a result of that. It’s also, as I mentioned earlier, one of the markets where we’ve seen the biggest decline in [housing] starts. So we’ve had some of our best results in cost reductions there, too. And now, as I’m calling, that is starting to stabilize—we’ve got that combination. I think we found that market [in Florida]. We’ve driven cost [in Florida] down, and now we’re starting to take it back the other way,” McGibney said.

​​McGibney stopped short of declaring a statewide turnaround but said the builder is encouraged by recent trends. “I’m not necessarily calling it an inflection point for the whole state of Florida, but we’ve been encouraged by what we’ve seen recently.”

KB Home executives also noted varying conditions across other major markets. California’s Inland Empire, Las Vegas, Houston, and Charlotte, North Carolina, all posted solid demand in Q3, while coastal California, Seattle, and Denver remain more challenged.

Still, for Florida—the market that’s defined much of 2025’s housing weakness—the shift from deep price cuts toward selective price increases marks a notable change in tone.

ResiClub PRO members can read our full report on KB Home here.

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