PulteGroup’s third-quarter net income fell 19% to $476 million as rising mortgage rates kept buyers away, and the homebuilder reported fewer new orders in five of its six regions. Florida was the exception: orders there rose 6% from a year earlier.
The Atlanta-based builder, whose brands include Centex, Pulte Homes and Del Webb, earned $2.53 per share in the quarter ended Sept. 30, down from $586 million, or $2.96 per share, a year earlier, according to its third-quarter earnings release filed with the Securities and Exchange Commission on Oct. 22.
“The rapid increase in interest rates has stretched affordability even further, made selling an existing home even harder, and has pushed even more consumers to the sidelines,” President and CEO Ryan Marshall said in the release. The company said it would “appropriately balance the price and pace of home sales, align production accordingly, and remain disciplined in our allocation of capital.”
PulteGroup earnings by the numbers
- Closings: 6,876 homes, down 9% from 7,529.
- Home sale revenue: $3.9 billion, down 9% from $4.2 billion.
- Average selling price: $561,000, down 1% from $564,000.
- Home sale gross margin: 24.8%, down from 26.2%. That figure includes $26 million of land impairments, about 70 basis points of margin.
- Net new orders: 6,208 homes worth $3.5 billion, down 6% in units from 6,638.
- Backlog: 10,298 homes worth $6.4 billion, up 4% in units and 3% in value.
Overhead took a bigger share of a smaller revenue base. Selling, general and administrative expenses were $397 million, or 10.3% of home sale revenue, compared with $401 million, or 9.4%, a year earlier. The average community count rose 7% to 1,077, which means each community sold fewer homes than it did a year ago.
Florida up, the West down sharply
PulteGroup’s regional tables show how uneven demand has become. Florida orders rose to 1,823 from 1,721, and the region’s backlog climbed to 3,097 homes from 2,694 β about 30% of the company’s total backlog.
Elsewhere, orders fell. Southeast orders dropped about 16% to 1,132. The West fell about 15% to 945, the Northeast about 15% to 316, and Texas about 8% to 862. The Midwest was nearly flat at 1,130, compared with 1,144. Closings in the West fell about 18% to 1,118, the steepest decline of any region.
The quarter’s slowdown follows a stronger first half. For the nine months through September, net new orders totaled 21,778 homes, slightly above the 21,486 a year earlier. Nine-month net income was $1.29 billion, compared with $1.72 billion in the first nine months of 2025.
Leaning on move-up and active-adult buyers
Marshall said more than 60% of PulteGroup’s business now comes from “more profitable move-up and active-adult homebuyers.” He credited that mix, and the margins it produces, with driving the quarter’s earnings. Unlike first-time buyers, move-up and active-adult buyers often bring equity from a home they already own, though Marshall also noted that higher rates have made “selling an existing home even harder.”
The company’s mortgage unit earned $46 million before taxes, roughly unchanged from a year earlier. Its mortgage capture rate β the share of the company’s mortgage-financed buyers who used its in-house lender β was 85%, up from 84%. Origination volume fell to 4,438 loans from 4,782.
Buybacks continue as cash falls
PulteGroup kept buying back stock. It repurchased 2.8 million shares for $350 million in the quarter, at an average of $124.70 per share. Over nine months it bought back 8.4 million shares, about 4% of shares outstanding, for $1.0 billion.
Cash fell to $1.4 billion at Sept. 30 from $2.0 billion at the end of 2025. House and land inventory rose to $14.1 billion from $12.9 billion over the same period. The debt-to-capital ratio was 12.1%, up from 11.2% at year-end. On a net basis, after subtracting cash, debt-to-capital was 3.0%, compared with a net cash position at the end of 2025.
The quarter is markedly weaker than PulteGroup’s second-quarter report, when Marshall called the market “pretty good” despite an 11% revenue drop. Other builders’ recent reports show similar pressure. M/I Homes’ pre-tax profit fell 38%. KB Home reported a 20% revenue decline, though its backlog grew for the first time in four years. PulteGroup’s growing backlog makes it another builder with more homes in the pipeline than a year ago even as new sales slow. Its next test will be how many of those contracts close if rates stay where they are. More builder coverage is in our housing market section.
