PulteGroup last quarter had revenues of $3.8 billion, a 10% jump from the same period a year ago, as the nation’s housing shortage promises to fuel more construction, the company announced Tuesday.
The Atlanta-based homebuilding giant reported a 32% bounce in earnings, an 11% increase in the number of homes sold, as well as a higher profit margin and a surge in the number of new orders for homes during the first three months of this year.
The report represents “outstanding financial results,” said Ryan Marshall, the company’s president and chief executive officer.
The 70-year old company currently lists homes for sale in 26 states under a variety of brands, including Del Webb, John Wieland Homes and Neighborhoods and American West. Its highest profits are in the Southeast and in Florida, executives said during a conference call with analysts and reporters.
In metro Atlanta, PulteGroup’s new neighborhoods include homes starting at $365,990 at Anderson Point in McDonough, for $461,990 at Pinebrook at Hamilton Mill in Auburn, and $648,504 at the Creek at Arthur Hills in Acworth. The homes range in size from two to seven bedrooms.
The average closing price for a PulteGroup home this past quarter was $538,000, said PulteGroup Chief Financial Officer Robert O’Shaughnessy.
The future is promising, Marshall said: The nation doesn’t have enough homes, the result of the years following the burst of the housing bubble and the 2007-09 recession in which many builders went bust and the surviving companies were cautious about committing to construction they weren’t guaranteed to sell.
With the economy growing solidly now, PulteGroup stands to gain from the need to catch up, perhaps garnering a higher percentage of the overall market, he said.
“After more than a decade of underbuilding, it is estimated that our country has a structural shortage of several million homes,” Marshall said. “We are well-positioned to expand our market share while helping to provide much-needed new housing stock.”
New home sales were up 8.8% in March from the level of a year ago, the strongest pace of construction since September, according to the U.S. Census Bureau.
PulteGroup sold 7,095 homes during the first quarter, 11% more than the same period of 2023.
Optimism about the near future is based on the company’s backlog, the company said: 13,430 homes worth $8.2 billion are in the pipeline for building.
“We can sell more homes or we can raise prices or, as in the case in the first quarter, we can do both,” Marshall said during an earnings call with analysts and reporters.
However, Marshall said that in the past few weeks, there has been “some moderation” in buying as rising mortgage rates convince some potential buyers to postpone their purchases.
The gross profit margin for the quarter was 29.6%, up 0.5 percentage points from the first quarter of last year and 0.7 percentage points higher than the fourth quarter of 2023. The company attributed that to “ongoing strength in homebuyer demand,” but also to building in parts of the country where margins tended to be better.
The company during the quarter re-purchased $246 million worth of its own stock, a move that tends to boost, or at least support, the price of its stock.
That stock has generally been on the rise for the past year.
A year ago, shares were selling for less than $69 a share. But in late March, PulteGroup stock hit a 52-week peak of $120.62 a share.
It closed at $107.05 a share on Monday afternoon. By early afternoon, share were selling for $112.57.
