PulteGroup, one of the largest U.S. homebuilders, took orders for 6,208 homes in the third quarter of 2026, 6 per cent fewer than a year earlier, and earned $2.53 a share against $2.96, the company said in its third-quarter release on Thursday. Closings fell 9 per cent to 6,876 homes.
The company was plain about why. "The rapid increase in interest rates has stretched affordability even further, made selling an existing home even harder, and has pushed even more consumers to the sidelines," said Ryan Marshall, president and chief executive. He described homebuying demand as "increasingly pressured by rising mortgage rates, widespread inflation, and global unrest."
How much have mortgage rates risen?
By more than a percentage point in a year. The average 30-year fixed mortgage rate was 7.32 per cent in the week to 22 October, according to Freddie Mac's Primary Mortgage Market Survey, down slightly from 7.40 per cent the week before but up from 6.19 per cent a year earlier. The 15-year rate was 6.68 per cent, against 5.44 per cent.
That is the backdrop to September's 7.3 per cent fall in signed contracts on existing homes, and to a monthly payment on a typical new loan that had risen by about $294 a month on a $400,000 loan by early October. PulteGroup's buyers face the same rates, although the company says more than 60 per cent of its business now comes from move-up and active-adult buyers, buyers who, in our reading, are more likely to have equity from a previous home to put down.
Where are sales falling?
Almost everywhere except Florida. The release's regional tables show orders in Florida rose to 1,823 homes from 1,721, about 6 per cent, by this publication's arithmetic. Orders fell about 15 per cent in the West, 16 per cent in the Southeast, 15 per cent in the Northeast and 8 per cent in Texas, and were roughly flat in the Midwest.
| Third quarter | 2026 | 2025 | Change | |---|---|---|---| | Net new orders (homes) | 6,208 | 6,638 | down 6% | | Closings (homes) | 6,876 | 7,529 | down 9% | | Average closing price | $561,000 | $564,000 | down 1% | | Home sale gross margin | 24.8% | 26.2% | down 1.4 points | | Net income | $476 million | $586 million | down 19% | | Unit backlog | 10,298 | 9,888 | up 4% |
Source: PulteGroup third-quarter 2026 earnings release.
The national figure flatters demand slightly. PulteGroup's average community count rose 7 per cent to 1,077, so each community sold fewer homes. Orders per average community fell about 13 per cent, by our arithmetic. More selling locations are producing fewer sales.
What is PulteGroup protecting?
Price, and therefore margin. Marshall said the company continues to "appropriately balance the price and pace of home sales," which in practice means accepting fewer sales rather than cutting prices sharply. The average closing price fell only 1 per cent, to $561,000. Home sale gross margin was 24.8 per cent, down from 26.2 per cent, and the release says about 70 basis points of that came from $26 million of land impairments.
The balance sheet shows what holding price costs. House and land inventory rose to $14.09 billion at 30 September from $12.93 billion at the end of 2025, an increase of about $1.2 billion. Operating cash flow for the first nine months fell to $637 million from $1.10 billion a year earlier, mainly because of that inventory build. The company issued $795 million of debt and repaid $613 million, and spent $1.03 billion on buybacks in nine months, including $350 million in the third quarter.
The result is a small change of sign. PulteGroup had net cash of $378 million at the end of 2025 and net debt of $401 million at the end of September, by the company's own reconciliation. Its debt-to-capital ratio was 12.1 per cent. That is still a conservative balance sheet for a homebuilder. It is less conservative than it was nine months ago.
Details to note
The backlog, homes sold but not yet closed, rose 4 per cent to 10,298 homes worth $6.4 billion, led by Florida at 3,097 homes. Customer deposits rose to $516 million from $388 million at year-end. The quarterly dividend was $0.26 a share, against $0.22 a year earlier. The mortgage unit's capture rate, the share of buyers who financed through it, was 85 per cent.
What to watch
Whether the inventory converts. Rising backlog and deposits suggest buyers who signed are still closing. If fourth-quarter closings fall faster than orders, or land impairments rise from $26 million, the company will be carrying more land and unsold homes into a market where rates have not come down. Freddie Mac's weekly survey will show first whether last week's small decline in rates continues.
Sources
- PulteGroup Q3 2026 earnings release (SEC Form 8-K, Exhibit 99.1, 22 October 2026)
- Freddie Mac Primary Mortgage Market Survey, week ended 22 October 2026
All PulteGroup figures and Ryan Marshall's quotations are from its third-quarter 2026 earnings release, filed as Exhibit 99.1 to its Form 8-K on 22 October 2026, including the regional order and backlog tables. Mortgage rates are from Freddie Mac's Primary Mortgage Market Survey for the week ended 22 October 2026. Orders per community, the regional percentage changes, the inventory increase and the swing to net debt are this publication's arithmetic. The analysis is our own.
Topics moneyhousingmortgage ratesearningsFlorida
