KB Home announced the grand opening of its Watermill community in Uhland, Texas, on January 19, 2026. The 1,200‑home development offers one‑ and two‑story homes priced from the mid‑$200,000s and features a playground, park, pavilion, and walking paths. The community sits just minutes from Texas State University and major employment centers, positioning it as an attractive option for families and professionals in the region.
The opening underscores KB Home’s built‑to‑order (BTO) strategy, which has become a key differentiator in a market where spec homes dominate. Each Watermill home is ENERGY STAR‑certified, reflecting the company’s commitment to energy and water efficiency. The BTO model allows KB Home to tailor homes to buyer preferences while maintaining higher margins than spec inventory, a critical advantage as the company seeks to offset margin compression seen in recent quarters.
KB Home’s Q4 2025 earnings highlighted a challenging environment: revenue fell 4% to $1.69 billion, and the homebuilding operating income margin slipped to 6.9% from 11.5% a year earlier. Housing gross profit margin also contracted from 20.9% to 17.0%. The company attributed the decline to price reductions, higher relative land costs, and a less favorable geographic mix. In response, KB Home guided for Q1 2026 housing revenues of $1.05–$1.15 billion and a full‑year 2026 revenue range of $5.1–$6.1 billion, signaling confidence that the BTO mix and improved build times will lift margins over the year.
CFO Robert Dillard emphasized that the company is “optimizing our assets, efficiently building affordable personalized homes, and aligning our costs with revenue expectations.” COO Rob McGibney added that the superior margins on BTO homes will “allow us to realize greater value from our communities” and that build times have improved roughly 20% year over year, a trend that should help absorb the additional inventory from Watermill without eroding profitability.
The broader housing market remains constrained by high interest rates, inflation, and affordability concerns, which have dampened demand for new homes. By launching Watermill, KB Home is adding inventory in a high‑demand corridor while leveraging its BTO model to mitigate price pressure. The community’s proximity to a major university and employment centers also positions it to capture a segment of buyers who value convenience and customization, potentially offsetting some of the headwinds in the broader market.
Overall, the Watermill opening represents a strategic investment in the Southwest that aligns with KB Home’s long‑term growth plan. While the company faces margin compression and a challenging macro environment, the new community, combined with its BTO focus and energy‑efficient homes, should help sustain revenue growth and improve profitability in 2026 and beyond.
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