A Debit to Fortune for a piece on KB Home’s new business strategy: build smaller and charge less, in line with what reporter Shawn Tully calls the New Affordability. Okay.

But, in a real feat for a housing story, this profile on KB barely mentions the credit crisis. And when it does, we get an odd take. Like this:

In hindsight, the reason for the current malaise is simple: too few buyers.

Yes, as housing prices shot up fewer people could afford to buy. But that was not the cause of the problem. It was one of its many symptoms.

The cause has more than a little to do with KB itself. Anyone heard of Countrywide KB Home Loans? Need we say more?

Fortune not only ignores KB’s role in the credit crisis, it also downplays the role of corporate mismanagement in KB’s own tumble.

During the bubble KB lost its way.

Okay. But then:

Building big, pricey homes wasn’t a mistake—that’s what the public wanted. The real problem was that management misread the future: It bought the illusion that the frenzy would last…

Look, the frenzy never lasts, so if KB really thought it would that was beyond misreading—it was downright delusional.

Fortune writes that, in 2005 and 2006, KB took a “detour” from its modest business model and went a bit crazy: It bought too much land, built expensive houses, hired Martha Stewart as a designer, etc.

Fortune does place “some” of the blame for this spree on then-CEO Bruce Karatz, but lays the company’s misfortunes at the feet of “market forces,” explaining:

Builders could sell all the $400,000 homes they wanted, and the margins on those McMansions were a lot fatter than on small houses, chiefly because they could build them on virtually the same small lots as the old-fashioned starter houses.

It’s hard to see how “market forces” forced KB to do any of this. KB, and many of its fellow home builders, saw gold in them thar’ hills, and went after it full bore. Sacrificing future stability for current profits was a bad business decision, not something the market forced on it.

Fortune also downplays the results of these bad decisions because the company has been able to increase its cash hoard in the last year and a half.

That’s interesting but needs context, and it would have been a good place to talk about the housing crisis. The fact is, the housing market is still terrible and foreclosures keep climbing.

Here is Mezger himself in Forbesafter KB announced its first-quarter losses:

‘We do not anticipate meaningful improvement in these conditions in the near term, as it is likely to take some time for the market to absorb the current excess housing supply and for consumer confidence to improve,’ said Chief Executive Jeffrey Mezger of KB Home. ‘Until prices stabilize and consumer confidence returns, we believe inventory levels will remain significantly out of balance with demand,’ Mezger added.

But we don’t get this from Fortune. Instead, it reports a misleading comment from one of its analysts, based on a one-month uptick in Southern California home sales, on the state of the residential real estate market:

‘Those first-time buyers got locked out by high prices,’ says John Karevoll of DataQuick, a research firm that assembles data on the U.S. real estate market. ‘Now the buying activity that was on hold is starting to come back.’

Really. Not from our data. Existing home sales are not rebounding, according to the National Association of Realtors. There may have been a brief upward blip in February, but now the numbers are back down—to as low as they’ve ever been over the past year. And surely no one is accusing the NAR of erring on the negative side.

The Southern California sales increase referenced by the DataQuick analyst doesn’t look so good either. Sales were up again in May, but still at the lowest level for the month in the twenty years of record-keeping by DataQuick.

Oh, and one more thing. About that housing crisis: It may be closer to KB than the company would like to admit. Two California couples are suing KB for alleged collusion with unscrupulous lenders to inflate the price of houses.

Now is not the time for a puff piece on a homebuilder.

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Elinore Longobardi is a Fellow and staff writer of The Audit, the business-press section of Columbia Journalism Review.