A homebuilder has some numbers out. "Home builder KB Home on Wednesday said its fiscal first-quarter profit rose 42 percent, partly on higher home prices, and maintained its outlook for the year, despite a fall in new orders. The Company generated 8,719 net orders during the quarter ended February 28, 2006, a decrease of 12% from the 9,901 net orders posted in the first quarter of 2005."

"'After several years of exceptional growth and rapid price escalation in many housing markets, it is likely that we will see some markets pull back this year from their recent pace,' said CEO Bruce Karatz. 'Our gross orders, which were only slightly below the year-earlier quarter, reflected steady demand. However, higher cancellation rates, which rose to more normalized levels, adversely impacted our net order comparison in the first quarter. Since we are just entering our prime selling season, it is still too early in the year to forecast the longer-term sales trend.'"

"'Nationally, it is clear that some housing markets have moderated from the over-heated and, in some cases, speculative pace of growth of the past few years,' said Karatz. 'There are signs of cooling in the hottest markets on both coasts and a shift in investor activity from buying to selling, resulting in less demand and increased supply in certain markets.'"

"'We endeavor to create value for our shareholders in a number of ways (including) an aggressive share repurchase program,' said Karatz. 'Over the past two quarters, we have opportunistically repurchased four million shares of common stock, and we retain the authority, under our current share repurchase program, to repurchase an additional eight million shares.'"

"The Company repurchased two million shares of its common stock during the first quarter of 2006 at an aggregate price of $154.4 million. 'We expect to use our strong cash-generating abilities in the future..to repurchase additional company common stock if market conditions and buying opportunities warrant it,' Karatz said."

The firms cash position is less than half of what it was one quarter before, at $71 million. The accounts payable is $945 million, versus $722 million a year before. They are basically borrowing to buy back the stock.

Revenue was up by $559 million, yet net income rose only $52 million. Of course, KBH was able to capitalize $46.8 million of the total interest of $51.5 million, meaning it was added to inventory instead of reducing the net income. About that inventory: it grew 48% over the past year; from $4.7 billion to $6.9 billion.

New orders were down significantly on the west coast and in the southwest and central regions, and flat in the southeast. The only sigificant increase in new orders was in France.