LOS ANGELES -- KB Home's first-quarter loss narrowed as the homebuilder delivered more homes at higher prices during the period.

The U.S. housing market is recovering after stagnating for roughly five years. Steady job gains and near-record-low mortgage rates have encouraged more people to buy.

KB Home said Thursday that it lost $12.5 million, or 16 cents per share, for the three months ended Feb. 28. That compares with a loss of $45.8 million, or 59 cents per share, a year ago.

Analysts predicted a loss of 21 cents per share, according to a FactSet poll.

KB Home shares rose 47 cents, or 2.1 percent, to $22.04 in morning trading Thursday after rising as high as $22.38 earlier in the session. FactSet said that was its highest level in almost a decade.

Homebuilders are a bellwether for the housing market and the economy. While new homes represent less than one-fifth of the total housing market, construction of houses has a major impact on the economy.

KB Home's results come a day after Lennar Corp. reported that its first-quarter net income more than tripled as new orders and deliveries continued to rise.

Evidence continues to mount that the housing market is improving. On Wednesday analysts at Morgan Stanley research increased their projection for U.S. home price appreciation this year to a 6 to 8 percent range from their earlier 4 to 6 percent forecast.

And on Tuesday the Commerce Department reported that U.S. builders started more homes in February and permits for future construction rose at the fastest pace in 4 1/2 years.

KB Home's first-quarter revenue surged 59 percent to $405.2 million from $254.6 million. Wall Street expected revenue of $364.4 million for the Los Angeles company.

Home deliveries climbed 29 percent to 1,485, while the average selling price increased to $271,300 from $219,000. KB Home said that this is its highest first-quarter average selling price since 2006.

Net orders climbed 40 percent to 1,671.

Backlog, an indicator of potential future housing revenue, rose 53 percent to $703.9 million from $460 million a year earlier.