PulteGroup quarterly profit falls as home affordability pressure persists

July 22 (Reuters) - PulteGroup on ‌Wednesday posted ​a ​fall in second-quarter profit as the homebuilder's incentives for buyers facing challenges with high interest ‌rates and rising costs weighed on the company's margins.

• ⁠U.S. homebuilders have been navigating rising costs due to persistent inflation, ‌as well as weakening ‌consumer sentiment.

• "Overall, market conditions remain highly competitive as macroeconomic uncertainty, volatile interest rates and strained affordability weigh on ​housing demand," said CEO Ryan R. Marshall.

• The benchmark 30-year mortgage rate has hovered around 6.6% in recent ⁠months, far above the 4.3% average of the previous decade, and is unlikely ​to fall materially anytime soon.

• To stimulate demand, builders have been employing sales incentives like ​mortgage rate buydowns, which in turn ‌hurts their margins.

• Gross profit margin in the quarter decreased to 25%, compared with ⁠27% a year ago.

• PulteGroup earned $2.48 per share in the quarter ended June 30, compared with $3.03 per share a year ago.

• ⁠Second-quarter home sale revenues decreased 11% from the prior year, reflecting ​an 8% decrease in completed home sales in combination with a 3% decrease in average sales price.

• However, new orders for the ‌quarter increased 6%, helped by a larger number of open communities, which boosted sales across ‌all buyer groups.

• The company's total quarterly revenue fell ⁠9.6% from a year ago ‌to $3.98 billion, but ​came above analysts' estimate of $3.93 billion, according to data compiled by LSEG.

(Reporting by Aatreyee Dasgupta in ‌Bengaluru)

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