"With the fourth largest population and fifth largest economy in the United States, Florida is an exceptionally attractive market with tremendous potential for growth," said Bruce Karatz, Chairman and CEO of KB Home. "Florida also fits the highly selective criteria KB Home utilizes in deciding in which markets to build homes and, as a growing region in the state, Jacksonville is a natural point of entry. KB Home has a strong track record of entering new markets and establishing leading market positions in every region in which we operate. In Texas, we grew from a non-entity to the largest builder in the state within four years. Similarly, we expect the acquisition of Trademark will lay the platform for KB Home's future expansion in Florida. The Florida market has very similar characteristics to our existing operations in the West, Southwest and Central United States, making it a natural next step in the ongoing expansion and diversification of our domestic operations."

Trademark is the second largest homebuilder in Jacksonville, with 20 active communities in the Northern Florida areas of Duval County, Clay County, St. Johns County, Nassau County and Flagler County (Palm Coast). As a result of the acquisition, KB Home now controls more than 4,000 lots in the market. Trademark is focused on the first-time, first-move-up market, offering award-winning homes ranging in size from 1,300 to 3,000 square feet. In 2002, the Company is expected to deliver approximately 650 homes at an average selling price of $161,000, generating revenues of more than $100 million.

Karatz continued, "Trademark is a top-notch, quality homebuilder with a strong management team, a proven track record, and an operating philosophy and commitment to customer satisfaction consistent with that of KB Home. These compelling assets, combined with the implementation of our KB2000 operating model to further improve margins and expand the business, will create a leader in a region where a growing population, low unemployment and strong job growth continue to fuel the demand for new homes."

Following the completion of the acquisition, Trademark founders J.D. Collins and Tony Raso will maintain close working relationships with KB Home. Raso will continue in his current operating role, becoming Division President of KB Home's Jacksonville operations. Collins, a leading land developer in Jacksonville and North Florida, will continue to own and operate his land development business, The Collins Group, while providing KB Home with preferred access to buy lots in the future.

"We are thrilled that both Joe and Tony, two well-known industry veterans, will continue to work closely with KB Home going forward," said Karatz. "Their local knowledge and expertise is invaluable, and I look forward to working together to achieve our shared vision of making the American Dream a reality for Florida families."

"KB Home has an outstanding reputation for providing quality and value to first-time and first-move-up homeowners, and I am excited to become a part of that winning team," said Collins.

Raso added, "KB Home will take our operations to the next level, allowing us to take full advantage of the tremendous potential for continued growth and expansion in Northern Florida."

Consistent with its presence in other regions across the country, and as part of its KB2000 model, KB Home plans to open one of its signature KB Home Studios - which offers homebuyers more than 5,000 options to personalize their new homes - in Jacksonville.

KB Home is one of America's largest homebuilders with domestic operating divisions in some of the fastest-growing areas of the country including California, Arizona, Nevada, New Mexico, Colorado, Texas and Florida. Kaufman & Broad S.A., the Company's majority-owned subsidiary, is one of the largest homebuilders in France. In fiscal 2000, the Company delivered homes to 22,847 families in the United States and France. It also operates a full-service mortgage company for the convenience of its buyers. KB2000 is the Company's proprietary business model that provides high earnings visibility and improved margins, as well as the ability to sustain growth regardless of the economic cycle. Founded in 1957, KB Home is a Fortune 500 Company listed on the New York Stock Exchange under the ticker symbol "KBH." For more information about any of KB Home's new home communities, call 888-KB-HOMES or visit the Company's Web site at www.kbhome.com.

Except for the historical information contained herein, certain matters discussed in this press release are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995, including any statements concerning future financial performance, business and prospects, and future Company actions and their expected results. These forward-looking statements are subject to risks, uncertainties and assumptions including, but not limited to, changes in general economic conditions, material prices, labor costs, interest rates, uncertainties associated with California's electricity supply problems, the secondary market for loans, consumer confidence, competition, currency exchange rates (insofar as they affect the Company's operations in France), environmental factors, government regulations affecting the Company's operations, the availability and cost of land in desirable areas, unanticipated violations of Company policy, unanticipated legal proceedings, and conditions in the capital, credit and homebuilding markets. See the Company's Annual Report on Form 10-K and its Annual Report to Shareholders for the year ended November 30, 2000 and its other filings for a further discussion of these and other risks and uncertainties applicable to the Company's business.

Media Contacts:
Kate Mulhearn
Director, Public Relations
(310) 231-4147 or kmulhearn@kbhome.com