Homebuilder Pulte Group (PHM) said Tuesday that the chronic housing shortage in the United States is giving the company an opportunity to expand its market share.
“After more than a decade of construction shortages, our nation is estimated to be structurally short of millions of homes,” Pulte Group CEO Ryan Marshall said in a press release. said. “Our strong financial performance reflects favorable demand conditions and a balanced approach that enables us to more effectively meet the individual needs of first-time, emerging, and active adult consumers. It reflects both operating models.”
The comments came as the company reported first-quarter results that beat Wall Street expectations, sending its stock up as much as 4%.
PHM reported earnings of $3.10 per share and revenue of $3.95 billion. Wall Street analysts had expected EPS of $2.36 and revenue of $3.58 billion.
Home builders like Pulte have been able to cope with the high interest rate environment by offering incentives to buyers. Last week, the average interest rate on a 30-year fixed loan was over 7%, according to Freddie Mac.
Marshall also said on the company’s first-quarter earnings call that home prices are likely to continue rising due to limited inventory.
“Our ability to offer targeted incentives, particularly mortgage rate buydowns, is a powerful tool to help close the affordability gap,” he said.
He added that in the first quarter, “approximately 25% of homebuyers took advantage of our national interest rate program. In a world where the consensus is that interest rates will remain high for an extended period of time, our interest rate incentives is likely to be an even greater competitive advantage, especially in Comparison with existing home sellers. ”
