PulteGroup's stock surges toward 13-year high as effort to attract more first-time home buyers worked
Shares of PulteGroup Inc. (PHM) surged 3.1% toward a 13-year high in afternoon trading Tuesday, after the home builder reported third-quarter profit that fell less than expected, while revenue surprisingly increased. The number of homes delivered during the quarter increased, compared with expectations of a decline, while the number of new orders increased more than expected. On the post-earning conference call with analysts, Chief Executive Ryan Marshall said that while overall U.S. housing demand has been supported by an ongoing economic expansion, "the catalyst for the most recent rise in housing demand has likely been the decline in interest rates" and the impact that has had on affordability. The average interest rate for a 30-year fixed rate mortgage was 3.69% for the week ended Dec. 17, according to Freddie Mac (FMCC), down from 4.85% around the same time a year ago. The average sales price of homes increased 3% to $491,000, while prices of first-time homes decreased 6% to $340,000, reflecting Pulte's effort to increase entry-level exposure. It worked, as orders from first-time buyers increased 39%. The stock, on track to close at the highest level since April 2006, has soared 51.5% year to date, while the SPDR S&P Homebuilders ETF (XHB) has rallied 40.5% and the S&P 500 has gained 19.9%.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
October 22, 2019 14:43 ET (18:43 GMT)
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