Higher home prices drive Pulte’s third-quarter profit beat 

Higher home prices drive Pulte’s third-quarter profit beat  2

PulteGroup topped Wall Street estimates for profit on Tuesday, as the homebuilder was able to sell more homes at higher prices in a housing market that it admitted is slowing in the face of rising interest rates.

Shares of the homebuilder, however, fell 1.8 percent before the bell as orders in the third quarter came below expectations.

The housing market, which has been a weak spot in an otherwise robust economy, has been hobbled by a short supply of homes and higher prices, dampening affordability for potential buyers. Rising mortgage rates that outpace the rate of wage growth have also added to the concerns of homebuyers.

“The critical underpinnings that have supported a slow but steady housing recovery…remain solidly in place,” Chief Executive Ryan Marshall, said, adding that buyer concerns around affordability and rising mortgage rates appear to have impacted near-term market dynamics.

Pulte, which mainly sells single-family homes, said the average home price rose to $427,000 from $399,000 a year earlier, while the number of homes sold rose to 6,031 from 5,151.

Orders, an indication of future revenue for homebuilders, rose marginally to 5,350 homes, below estimates of 5,512 homes, according to Refinitiv data.

Pulte’s net income rose 63 percent to $289.5 million, or $1.01 per share, in the third quarter ended Sept. 30, from $177.5 million, or 58 cents per share, a year earlier.

Revenue rose 24.3 percent to $2.65 billion.

Analysts on average had expected 95 cents per share, according to Refinitiv data.

The post Higher home prices drive Pulte’s third-quarter profit beat  appeared first on USNewsRank.