KB Home feels housing slump

KB Home, one of the nation’s largest home builders, said Friday its third-quarter loss quadrupled from the year-ago period, missing Wall Street’s expectations as revenue plunged by 56 percent amid falling sales and home prices.

Chief Executive Jeffrey Mezger said weak demand for new homes – half of the company’s homebuyers backed out of their contracts in the quarter – and falling home values don’t appear likely to improve significantly in the near term. He also blamed rising foreclosures and tight lending standards for the company’s poor results.

The Los Angeles-based company reported a net loss of $144.7 million, or $1.87 a share, for the three months ended Aug. 31. In the same period last year, KB Home reported a loss of $35.6 million, or 46 cents a share, when KB Home recorded a generous gain from the sale of its French operations.

But without those gains, the year-ago losses totaled a whopping $478.6 million, or $6.19 a share.

ALBANY, N.Y.

Short-selling probe widens

New York Attorney General Andrew Cuomo is broadening his investigation of short-selling on Wall Street, according to a senior official in his office.

Cuomo is turning to the massive credit-default swap market, which he believes may have been manipulated in order to give the impression that certain companies were in trouble.

The official said Friday that Cuomo has subpoenaed information from providers of market data in what could be a huge probe into one of the factors contributing to volatility in the stock and credit markets.

WASHINGTON

Mortgage rates rise above 6 percent

Rates on 30-year mortgages, which had been falling for five weeks, jumped sharply this week, reflecting the turbulence in global credit markets.

Freddie Mac reported Thursday that its nationwide survey found that the average for 30-year, fixed-rate mortgages rose to 6.09 percent this week, up from 5.78 percent last week. Last week’s rate had been the lowest level for 30-year rates since February.

The increase, which pushed rates above 6 percent for the first time since early September, was blamed on turbulent financial markets, which in recent weeks have been hit by the biggest upheavals on Wall Street since the Depression.

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, rose to 5.77 percent, up from 5.35 percent last week.

Rates on five-year, adjustable-rate mortgages averaged 6.02 percent this week, up from 5.67 percent last week.

From wire reports