UPDATE 2-KB Home says exiting Atlanta market

(Adds details about company's markets)

NEW YORK, Dec 18 (Reuters) - KB Home (KBH.N), the fifth- largest U.S. homebuilder, has decided to leave the Atlanta, Georgia, market after completing homes under construction in four communities.

"KB Home has made the strategic decision not to invest in additional communities in Atlanta and make a gradual transition out of its operations in the market," the company said in a statement received on Thursday.

KB Home declined to say which markets it has pulled out of and the markets in which it is still doing business.

However, according to the company's annual filing in 2007 with the U.S. Securities and Exchange Commission, KB Home operated in 13 states and 35 markets, down from 15 states and 40 markets in 2006. The annual report for 2007 is the most recent available. KB Home added Orange County and San Bernardino, California in 2007.

In 2007, the company did not list Bakersfield, California; Indianapolis, Indiana; New Orleans and Baton Rouge, Louisiana; McAllen, Texas; Fort Myers and Port St. Lucie, Florida in its list of markets, although they appeared in its 2006 list.

The company declined to comment on whether it might exit more markets in the future. (Reporting by Helen Chernikoff, editing by Dave Zimmerman and Andre Grenon, Toni Reinhold)