Jan. 9 (Bloomberg) -- KB Home, the fourth-largest U.S. homebuilder, reported a fourth-quarter loss exceeding analysts' estimates and the company predicted more pain for the housing market in 2009.

The builder had a net loss of $307.3 million, or $3.96 a share, compared with a median estimated loss of $96.9 million, or $1.19 a share, by 10 analysts in a Bloomberg survey. The loss narrowed from $772.7 million, or $9.99 a share, a year earlier, Los Angeles-based KB Home said today in a statement. Revenue fell 56 percent to $919 million.

New home sales in November dropped to a 17-year low nationwide and the median house price declined 12 percent to $220,400, according to the U.S. Commerce Department. KB Home took quarterly charges of $265.9 million to write down inventory and land it no longer intends to build on.

``The housing industry continues to confront unprecedented downward pressure,'' Chief Executive Officer Jeffrey Mezger said today in a conference call with analysts and investors. ``These conditions persist nationally with no visible signs of lessening in the near term.''

KB Home fell 40 cents, or 2.8 percent, to $14.17 in New York Stock Exchange composite trading.

The company's average home price fell 6.4 percent in the fourth quarter to $232,000 and orders declined 50 percent to 1,296. The cancellation rate was 46 percent.

First-Time Buyers

KB Home is cutting prices to compete with foreclosures and attract first-time buyers, who have an easier time purchasing because they don't need to sell an existing home, Mezger said. That market now represents 66 percent of the company's customers.

``We look to drive our percentage of first-time buyers even higher going forward,'' Mezger said.

For the year ended Nov. 30, 2008, revenue was $3.03 billion, falling 53 percent from a year earlier, the company said. The number of homes delivered in fiscal 2008 declined 48 percent to 12,438 and the average selling price for the year slid 10 percent $236,400.

A year ago, the company had $917.6 million of writedowns and tax expenses in the fourth quarter, including $403.4 million on joint ventures, costs to write down land values and abandon options on property.

Cash On Hand

KB Home ended the fiscal year with $1.3 billion in cash, about $300 million more than expected, said William Hollinger, the company's chief accounting officer. The homebuilder forecast positive cash flow for 2009, after previously expecting to be cash-flow neutral this year, Mezger said.

``We believe KBH is in an extremely tough position in the near term,'' Pali International, a London-based investment research company, said in a note this week. Its analysts cited the swollen inventory of unsold houses as KB Home's main challenge.

KB Home's shares have dropped 17 percent in the past 12 months, compared with an 11 percent decline in the Standard & Poor's Supercomposite Homebuilding Index.

KB Home was founded in 1957 by Eli Broad and Donald Kaufman to sell homes to World War II veterans starting families. The company operates in 13 U.S. states, including California, Florida, Nevada and Arizona.

To contact the reporter on this story: Daniel Taub in Los Angeles at dtaub@bloomberg.net.

Last Updated: January 9, 2009 16:31 EST