* Q2 loss/shr $0.31 vs loss $0.89 a year ago
* Q2 revenue rises 11 pct
* Average selling price up 9 pct to $233,000
* Shares rise as much as 7 pct
June 29 (Reuters) - KB Home signaled a return to profitability after two quarters of losses as higher selling prices and new orders provided more evidence of a fledgling recovery in the U.S. housing market, driving up its shares 7 percent.
KB Home said net orders increased 3 percent to 2,049 homes in the second quarter, and rose 18 percent in value to $503.1 million.
“Entering the second half of 2012, we have a strong backlog of homes with higher selling prices and better margins to help restore profitability,” Chief Executive Jeffrey Mezger said in a statement.
Rival Lennar Corp, the first to release second-quarter results from the homebuilder pack this week, reported a 40 percent jump in orders.
Lennar, the third-largest homebuilder by revenue in the United States, said it was able to charge higher prices as home buyers looked to take advantage of record-low interest rates.
KB’s second-quarter net loss narrowed to $24.1 million, or 31 cents per share, from $68.5 million, or 89 cents per share, a year earlier.
The company’s shares, which lost 6 percent in the three months to Thursday’s close, were up 6 percent at $9.20 in morning trade. They touched a high of $9.28. The broader S&P 1500 Homebuilding Sub-Industry Index was up 3 percent.