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Homebuilder Pulte Reports Biggest Decline in Orders Since 2013

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Tuesday, 29 January 2019 09:43 AM

The United States' third largest homebuilder PulteGroup Inc posted its largest decline in orders in five years on Tuesday, joining larger rival D.R. Horton Inc in saying buyers were being priced out of the U.S. housing market.

Pulte's shares (PHM) fell 3.4 pct to $26.10 in trading before the bell after it said orders fell 11.2 percent compared to the same period a year ago, to 4,267 homes. The average analysts' estimate was 4,584.

The company's results showed net income tripled to $237.6 million, or 84 cents per share, in the quarter ended Dec. 31, but were skewed by the impact of tax charges a year ago and Chief Executive Officer Ryan Marshall gave a warning about the state of the market.

"Conditions grew more challenging as 2018 progressed, with homebuying demand softening in response to affordability challenges and general market uncertainty," Marshall said.

Larger rival D.R. Horton last week reported its slowest order growth in more than five years, but forecast improved demand for its homes in the upcoming spring selling season.

The housing market has been stymied by a combination of higher mortgage rates, steadily rising prices and land and labor shortages, which have put pressure on both asking prices and the costs of building new homes.

Housing data last week showed U.S. home sales tumbled to their lowest level in three years in December and house price increases slowed sharply.

While economists expect affordability to improve, they also caution that changes to the tax code in December 2017, which limited deductions for mortgage interest and property taxes, had reduced the appeal of home ownership.

Last year the company's net income included a $57 million pre-tax charge and $181 million related to income tax charges.

Total revenue rose 7.3 percent to $2.99 billion from $2.79 billion in the reported quarter. 

© 2019 Thomson/Reuters. All rights reserved.

   
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The United States' third largest homebuilder PulteGroup Inc posted its largest decline in orders in five years on Tuesday, joining larger rival D.R. Horton Inc in saying buyers were being priced out of the U.S. housing market.
homebuilder, pulte, decline, orders, houses
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2019-43-29
Tuesday, 29 January 2019 09:43 AM
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