Challenging market conditions—including high interest rates, consumer macroeconomic concerns, and affordability issues—slightly weighed down closings and net new orders during the second quarter for PulteGroup.
President and CEO Ryan Marshall described the current market conditions as “highly competitive” but expressed optimism in the results posted by the company as well as the continued alignment between production and land investment. Incentives remain an important tool for the builder to achieve sales in a challenging environment. In the second quarter, incentives were 8.7% of gross sales price, up from 6.3% a year ago and from 8.0% in the first quarter.
During the quarter, ended June 30, PulteGroup reported net profit of $608 million, or $3.03 per share, down from net profit of $809 million, or $3.83 per share, in the second quarter of 2024.
By the Numbers
- Home sale revenue declined 4% year over year to $4.3 billion, driven by a 6% decrease in closings to 7,369. The decline was partially offset by a 2% increase in average sales price to $559,000.
- Net new orders declined 7% in the second quarter for 7,083 homes. The company’s cancellation rate in the quarter was 11%, unchanged from the first quarter
- PulteGroup operated out of an average of 994 communities in the second quarter, up 6% compared to the second quarter of 2024.
- The company’s backlog totaled 10,779 homes with a value of $6.8 billion.
- PulteGroup invested $1.3 billion in land acquisition and development in the period, with 51% of land spend allocated to development. At quarter’s end, the builder owned 100,982 lots and controlled 148,663 lots.
What They’re Saying
Over the course of the 2025 spring selling season, we saw consumers dealing with a range of issues from high interest rates and challenged affordability to macro concerns about the strength of the economy. We are encouraged, however, by the positive consumer response we saw to the pullbacks in interest rates in late June and at times earlier in the year.” — Ryan Marshall, president and CEO, PulteGroup
“Given the market dynamics we experienced in the first half of the year, we have aligned our home production and land investment to effectively serve today’s current core demand, while positioning us to retain and grow our market share as demand strengthens in the future.” — Marshall
“Our business results continue to demonstrate the benefit of having large and stable operations in the Midwest, Southeast, and Northeast as these regions offset some of the more challenging market conditions the industry is facing out West and in Texas.” — Marshall
“Based on expected home sales and starts, we anticipate our spec inventory to be within our target range of 40% to 45% of overall units in production by year-end. In managing specs, we are trying to achieve multiple objectives including having enough units to meet higher demand, while still allowing our sales counselors to sell from a position of strength.” — James Ossowski, executive vice president and chief financial officer
