PulteGroup Q3 Earnings Fall 12% Amid Declining Home Closings and Affordability Challenges

PulteGroup reported a 12% decline in third-quarter earnings per share to $2.96 and a 16% drop in net income to $586 million, driven by a 5% fall in home closings and squeezed margins due to buyer incentives amid high interest rates and inflation. Despite a 2% decrease in total home sale revenues to $4.2 billion, the company saw a 3% rise in average selling prices, reflecting a shift in the geographic mix of homes sold. New orders declined 6% to 6,638 homes, with the backlog shrinking to 9,888 homes valued at $6.2 billion, while gross margin on home sales dropped to 26.2% from 28.8%. CEO Ryan Marshall highlighted ongoing affordability challenges, weakened consumer confidence, and recent interest rate cuts as key factors affecting demand, and the company plans to monitor the impact of upcoming tariffs expected to add approximately $1,500 per home in 2026. Despite these headwinds, PulteGroup generated strong cash flow, returned $344 million to shareholders through dividends and $300 million via share repurchases, and ended the quarter with $1.5 billion in cash and an 11.2% debt-to-capital ratio. The company’s quarterly results exceeded analyst expectations, with earnings per share and revenue outperforming estimates even as shares fell in early trading.