PulteGroup reported a contraction in third quarter results as rising mortgage rates and affordability pressures significantly impacted delivery volumes and profitability. Total revenue declined 10% year-over-year to $3.97 billion, while diluted EPS fell 15% to $2.53, both missing analyst expectations. Management cited a strategic pivot toward move-up and active-adult buyers, who now comprise 60% of the business, but noted that even these segments faced headwinds from stretched consumer purchasing power.
Key Highlights
- Home sale gross margin fell 140 basis points year-over-year to 24.8%, which included $26 million (70 basis points) in land impairments recorded during the period.
- Total home closings decreased 9% to 6,876 units, while the average selling price dipped 1% to $561,000, reflecting increased pricing pressure.
- Net new orders fell 6% to 6,208 units despite a 7% expansion in average community count to 1,077, indicating lower absorption rates per community.