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HomeMarketHome Builder PulteGroup Sees More Demand From Buyers

Home Builder PulteGroup Sees More Demand From Buyers

Home builder PulteGroup said demand from buyers has picked up as mortgage rates drop.

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David Paul Morris/Bloomberg

was leading builders higher Tuesday after reporting earnings that beat expectations. Though net new orders fell, the home builder says demand has improved as mortgage rates have dropped.

(ticker: PHM) reported earnings of $3.85 per diluted share on total revenue of about $5.2 billion in the fourth quarter. Such results represent an improvement of about 48% and 19%, respectively, from the final quarter of 2021, and exceeded
consensus expectations that called for earnings of $2.93 per share on about $4.6 billion in revenue.

“Within a rapidly evolving housing market, our organization remains focused on driving operational performance, ensuring an appropriate cadence of production, and intelligently managing our balance sheet,” Ryan Marshall, PulteGroup’s CEO, said in an earnings release.

The results, which cover the three months ended Dec. 31, mark a period of time when higher mortgage rates weighed on buyer demand. The average 30-year fixed mortgage rate peaked above 7% in October and November before trending down to a recent 6.13%.

As in the broader housing market and among other builders, rising rates weighed on buyer demand at PulteGroup. The company’s net new orders were 41% lower year-over-year in its fourth quarter. “The softer demand we’ve experienced is the result of consumers priced out of the market by higher prices and higher mortgage rates, along with those individuals who have moved to the sidelines given market uncertainties and risks,” Marshall said on a post-earnings conference call.

Recent buyer trends show that lower mortgage rates have made a difference, the company said. “Despite the higher rate environment dominating the national conversation, we saw buyer demand improve as the fourth quarter progressed and can confirm the strength continued through the month of January,” Marshall said. “We’ll have to see how things progress from here, but I think this improvement attests to the ongoing desire for homeownership that exists in this country.”

PulteGroup was trading 8.4% higher midday on Tuesday. Two exchange-traded funds that track the home building industry, the
SPDR S&P home builders
ETF (XHB) and the
iShares U.S. Home Construction
ETF (ITB), were up 3.3% and 3.4%, respectively.

Write to Shaina Mishkin at


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