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The Lock-In Effect Is Real—These 3 Homebuilders Are Betting on ItPulteGroup NYSE: PHM reported higher second-quarter orders and reaffirmed its full-year delivery and margin outlook, even as revenue and earnings declined from a year earlier amid fewer closings and a lower average sales price.
On the company’s earnings call for the quarter ended June 30, 2026, President and CEO Ryan Marshall said he was “extremely pleased” with PulteGroup’s operating and financial results for both the quarter and the first half of the year. He pointed to order growth across all buyer groups, reduced incentives from the first quarter and continued progress shifting the business back toward build-to-order sales.
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Netflix, Pulte, and Mobileye Are Buying Their Own Dips—Should You?Second-quarter net new orders rose 6% year over year to 7,536 homes, while the value of orders increased 5% to $4.1 billion, according to Executive Vice President and CFO Jim Ossowski. Orders increased across first-time, move-up and active adult buyer segments, rising 5%, 4% and 12%, respectively.
Orders Rise, While Revenue and EPS Decline PulteGroup generated home sale revenue of $3.8 billion in the second quarter, down from $4.3 billion in the prior-year period. Ossowski said the decline reflected an 8% decrease in closings to 6,997 homes and a 3% decrease in average sales price to $544,000.
Homebuilder Earnings: D.R. Horton Sticks Out as Pulte & NVR Sales TankOssowski said mix was a meaningful factor in the lower average selling price, as the company had fewer closings from its Northeast and West operations, which he described as PulteGroup’s two highest-priced operating geographies.
The company reported pretax income of $622 million and net income of $472 million, or $2.48 per share. That compared with net income of $608 million, or $3.03 per share, in the second quarter of 2025. Diluted shares outstanding fell by 10 million shares, or 5%, from the prior year to 191 million, and the company repurchased 3.1 million shares for $373 million during the quarter.
PulteGroup’s financial services operations generated pretax income of $37 million, compared with $43 million a year earlier. Ossowski said the year-over-year decline was primarily due to lower closing volumes in the homebuilding business. The company’s mortgage capture rate was 85%, comparable to the second quarter of 2025.
Margins Hold Near 25% as Incentives Ease Sequentially PulteGroup reported a homebuilding gross margin of 25% for the quarter, up 60 basis points from the first quarter. For the first half of the year, homebuilding gross margin was 24.7%.
Marshall said the company’s margins reflect a disciplined land underwriting process, diversification across markets and buyer groups, and a balanced approach to price and pace. He said PulteGroup’s gross margins are “in some instances” several hundred basis points higher than those of peers.
Ossowski said second-quarter incentives were 10.4%, down 50 basis points from the first quarter. He attributed the sequential margin improvement to a greater mix of closings from higher-margin Florida markets, lower-than-anticipated discounts on homes sold and closed in the quarter, and lower build costs.
House costs were just under $75 per square foot in the quarter, down 5% from a year earlier and about 1% from the first quarter. Ossowski said the company expects to lose the tailwind from lower lumber costs as the year progresses, though it still expects year-over-year house costs to be slightly lower than in 2025.
In response to analyst questions, Marshall said incentives remain elevated because of affordability challenges and a competitive market. He said the company had previously identified the first quarter as the “high watermark” for incentives, but cautioned that the company is not expecting a sharp improvement from current levels.
Build-to-Order Shift Continues Marshall said PulteGroup continued to execute its transition back to build-to-order homes, with build-to-order sales representing 45% of new orders in the second quarter. Year to date, build-to-order sign-ups rose 500 basis points as a share of total orders compared with the first six months of 2025.
Ossowski said the company’s long-term goal is for orders to be about 60% build-to-order and 40% spec. Marshall said during the question-and-answer session that PulteGroup likely reaches that 60% target sometime next year.
The company ended the quarter with 14,980 homes in production, of which 6,638, or 44%, were spec homes. PulteGroup also had about 1,400 finished spec homes, equal to 1.3 finished specs per community, down from 1.9 a year earlier. Marshall said the company has effectively reached the spec inventory level it wants, though some work remains in select communities.
Marshall said build cycles have recovered from the supply chain disruptions that followed COVID, with cycle times down to 100 working days or fewer in some markets. He said that gives PulteGroup the ability to manage starts while still meeting production goals.
Regional Trends and Buyer Mix Management described overall demand as following typical seasonal patterns during the quarter, with sales and absorption paces easing month to month. Marshall said consumer activity was affected at times by global tensions, macroeconomic uncertainty and movements in interest rates.
Ossowski said net new orders increased in every region except the West, where consumer demand has been slower to recover. Florida remained a standout, with second-quarter orders up 19% year over year. Marshall also cited strength in Midwest markets such as Columbus, Cleveland and Chicago, as well as Greenville and Coastal Carolina. He said Dallas and Houston showed year-over-year order improvement, though he said it was too early to “declare victory” in Texas.
Second-quarter net new orders were 39% first-time buyers, 36% move-up buyers and 25% active adult buyers. Ossowski said active adult orders benefited from the opening of new Explore by Del Webb communities in Tampa and Columbus. Marshall said the company now has Explore by Del Webb communities open in Southern California, Columbus and Tampa, with another planned east of Park City, Utah.
Guidance Reaffirmed, Land Investment Continues PulteGroup expects to close between 7,000 and 7,400 homes in the third quarter and reaffirmed its full-year 2026 closing guidance of 28,500 to 29,000 homes. The company expects average selling prices of $550,000 to $560,000 in both the third and fourth quarters.
Ossowski said PulteGroup expects third-quarter gross margin of 24.5% to 25.0% and reaffirmed the same range for the full year. The company also maintained full-year SG&A guidance of 9.5% to 9.7% of home sale revenue and an expected tax rate of 24.5%, excluding discrete tax events.
PulteGroup invested $1.4 billion in land acquisition and development during the quarter, bringing year-to-date land spend to $2.7 billion. Ossowski said the company remains on track to invest about $5.4 billion in land in 2026. It ended the quarter with 228,000 lots under control, 55% of which were controlled by option.
The company ended the quarter with $1.4 billion in cash and a debt-to-capital ratio of 12.3%. Ossowski said PulteGroup continues to expect operating cash flow of about $1 billion for 2026.
Marshall also addressed industry consolidation, saying PulteGroup’s first question on any acquisition is whether it would make the company “better, not just bigger.” He said the company prefers smaller tuck-in acquisitions that build local market scale and views M&A primarily as another way to acquire land.
About PulteGroup (NYSE:PHM)PulteGroup, Inc NYSE: PHM is a U.S.-based residential homebuilder that designs, constructs and sells single-family homes and develops master-planned communities. The company operates multiple national and regional brands that target different buyer segments, including first-time buyers, move-up buyers and active-adult customers. Its operations encompass land acquisition and development, home design and construction, community amenities and ongoing customer service and warranty programs.
PulteGroup markets homes under several well-known brands, such as Pulte Homes, Centex and Del Webb, among others, offering a range of product types from entry-level detached homes to larger, higher-end residences and age-restricted active-adult communities.
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