Weekly Real Estate News
PulteGroup reported lower third-quarter earnings Thursday as rising mortgage rates and economic uncertainty weighed on homebuyer demand, cutting into the company’s closings, orders and margins.
The Atlanta-based homebuilder reported net income of $476 million, or $2.53 per diluted share, for the quarter ended September 30, compared with $586 million, or $2.96 per share, a year earlier. That represents a roughly 19% decline in net income.
Home closings fell 9% to 6,876 units, while home sale revenue declined 9% to approximately $3.9 billion. Net new orders decreased 6% to 6,208 homes, with a value of about $3.5 billion. The home sale gross margin narrowed to 24.8%, compared with 26.2% a year earlier.
Backlog grows despite weaker quarterly sales
The company ended the quarter with 10,298 homes in backlog, up 4% from the prior-year period, and a backlog value of approximately $6.4 billion, up 3%. The increase complicates a uniformly negative reading of the results: current orders and closings weakened, but contracted future deliveries remained higher than a year earlier.
PulteGroup also recorded $26 million in land-related impairments during the quarter and repurchased $350 million of common stock.
President and CEO Ryan Marshall cited rising mortgage rates, inflation and global uncertainty as pressures on housing demand. The results offer another indication of the difficult balance major homebuilders face between maintaining sales volumes and preserving margins.
Source: PulteGroup’s October 22 earnings release distributed by Business Wire. Conference-call commentary and subsequent market reaction are not included in this initial report.
