PulteGroup, the Atlanta-based homebuilder, saw a modest 1.7% rise in third-quarter earnings despite the impact of rising interest rates. The company reported a net income of $638.8 million, or $2.90 a share, surpassing the average Wall Street estimate of $2.83 a share.
Strong Net New Orders and Revenue Growth
PulteGroup experienced a significant increase in net new orders, with a rise of 43% to 7,065. This solidifies the company’s position in the market, as it ended September with a backlog of 13,547 homes valued at $8.1 billion. Additionally, revenue grew by 2.8% to $4 billion, just slightly below the average analyst expectation of $4.05 billion.
Sales Price and Market Conditions
The average selling price of PulteGroup homes increased to $549,000 compared to $538,000 in the previous year. Despite rising interest rates, Pulte Chief Executive and President Ryan Marshall stated that the fundamental desire for homeownership remains strong in a market constrained by limited housing supply.
New Homes as a Bright Spot
While home sales in general have declined, new homes have emerged as a bright spot in the market. Few homeowners are willing to sell their residences and abandon their current mortgage rates for higher ones. As a result, demand for new homes has remained stable.