Shares of KB Home rose Tuesday after the Los Angeles home builder posted a narrower loss than expected and announced housing demand should pick up this year.

KB reported a fourth quarter net loss of $49.6 million (-64 cents per share), a sharp contrast to a profit of $304 million ($3.44) for the same period a year earlier. The company attributed the plunge to $343 million in write down expenses for land and abandoned property contracts. Wall Street analysts had been expecting a loss of $1.14 per share, according to a Thompson Financial.

Revenue rose 13 percent to $3.55 billion, helped mainly by an increase in the average selling price of homes. But orders for new homes plunged 50 percent to 3,763, swinging the nation’s fifth-largest homebuilder into its first quarterly loss in more than 10 years.

KB Chief Executive Jeffrey Mezger said in a statement that he expects demand to decrease at least “through the first half of 2007 and potentially longer.”

KB shares closed up 3 percent ($1.49) to $53.43 on Tuesday.