On November 7, 2025 KB Home opened three new built‑to‑order communities—Autumnwood, Summerfield, and Hayden—within the Tivoli master plan in Modesto. The developments sit at the corner of Sylvan Avenue and Aria Way, giving residents direct access to Highway 99, Interstate 5, and the region’s major employers. Homes are available in one‑ and two‑story floor plans with up to five bedrooms and three baths, and pricing starts in the $470,000 range. Buyers can customize finishes and layouts through KB Home’s Design Studio, and the communities will feature walking paths, a park, a playground, and a new elementary school within walking distance.
KB Home’s Q3 2025 earnings report showed a housing gross profit margin of 18.2%, down from 20.6% a year earlier, and a 8 % decline in housing revenue to $1.61 billion. The margin contraction reflects higher land and construction costs, pricing pressure, and a shift toward lower‑margin, higher‑volume projects. Despite the revenue decline, the company’s built‑to‑order mix rose to 70 %, a strategic move that has historically supported higher margins and customer satisfaction. The expansion in Modesto is part of this strategy, aiming to capture market share in a region where demand for personalized, energy‑efficient homes remains strong.
The Modesto housing market in 2025 has been dynamic: median home prices dipped 0.9 % year‑over‑year in September, yet homes sold in an average of 40 days, indicating a seller’s market. Central Valley buyers are increasingly relocating from pricier coastal areas, driving demand for affordable, energy‑efficient homes. KB Home’s focus on ENERGY STAR‑certified builds positions it well to meet this demand, while the new communities’ proximity to major transportation corridors enhances their appeal to commuters and families.
CEO Jeffrey Mezger emphasized that the Modesto openings reinforce KB Home’s commitment to the built‑to‑order model and shareholder value. “Consumers are responding favorably to the recent decline in mortgage rates, and our BTO approach allows us to deliver high‑quality, customized homes more efficiently,” Mezger said. He also highlighted the company’s ongoing investment in land acquisition—over $2.8 billion in 2024—and its focus on cost discipline to protect margins amid rising material costs.
The expansion aligns with KB Home’s full‑year 2025 guidance of $6.1 billion to $6.2 billion in housing revenue, a slight uptick from the prior year’s forecast. Management signals confidence that the new Modesto communities will help offset the broader market slowdown by tapping a high‑potential region. Headwinds such as high mortgage rates and rising construction costs remain, but the company’s energy‑efficient, BTO strategy and strong cost controls are expected to mitigate margin pressure in the near term.
Investors reacted positively to KB Home’s Q3 2025 earnings beat, with EPS of $1.61 versus the consensus estimate of $1.50—a $0.11 or 7.3 % beat—and revenue of $1.62 billion versus the $1.59 billion estimate. The market’s favorable response was driven by the company’s ability to maintain profitability despite a challenging macro environment, underscoring confidence in its cost‑control measures and the demand for its built‑to‑order homes.
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