Though I don't agree with it, I can understand why some investors might think that the housing market is just unstoppable. Builders left and right are reporting stellar earnings, and KB Home (NYSE:KBH), the nation's sixth-largest builder by market cap, is no exception.

For the third quarter, sales rose 44% as the company saw a 45% jump in housing revenue, fueled by a one-two punch of double-digit growth in deliveries and double-digit growth in average home-selling prices. Operating income jumped 96% as margins swelled. On the bottom line, net income rose 93% for the quarter.

It seems that everywhere you look in the press release, there are signs of strength. Backlog was up 47% in dollar terms (27% in unit terms), and pricing is obviously still solid for this builder. Net orders rose 17% in the quarter, and the company increased its earning guidance. Like other builders, including Lennar (NYSE:LEN), Hovnanian (NYSE:HOV), and TollBrothers (NYSE:TOL), you're not going to hear the "b-word" here (as in "bubble").

And yet, I'm concerned. The company didn't include a cash flow statement with its release, and I didn't hear any analysts asking much about cash flow. I mention this mostly because the link between operating (and free) cash flow and earnings over the past couple of years has gotten a little strange. I realize some quarter-to-quarter volatility in cash flow is normal, but KB Homes has seen some pretty dramatic swings -- in fact, excluding this quarter, four of the past six quarters have seen very large negative operating cash flow numbers. Maybe the torrid market for new homes is responsible or maybe it's just "one of those things." Either way, I think it's worth closer attention.

In general, the story on KB Homes is pretty much the same as with other builders, though KB has pretty good geographic diversification. But it still comes down to how you see the housing market shaping up. If you think demand for new housing will stay healthy, it's probably not a stretch to assume that earnings for the builders will be pretty good. If you think the new housing construction market is poised to slow down or fall, you probably don't want to own a builder.

More constructive takes:

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).