PulteGroup, Inc. (NYSE: PHM) reported second-quarter 2026 earnings per share of $2.48, beating the $2.38 estimate, while CEO Ryan Marshall described the U.S. housing market as "pretty good" despite an 11% year-over-year decline in home sale revenue. The homebuilder’s shares rose on the results, driven by a 6% increase in net new orders to 7,536 homes and broad-based demand across buyer segments, including active adults, first-time buyers, and move-up buyers. Marshall’s optimism contrasts with broader industry warnings about affordability pressures and mortgage rates hovering around 6.5%.

CEO Commentary and Market Outlook

Speaking with CNBC, Marshall emphasized that PulteGroup’s national footprint and diversified customer base have helped it outperform despite economic uncertainty. He noted that order growth was seen in every category: entry-level, move-up, and retiree buyers. Marshall highlighted the company’s balance sheet and land pipeline as key factors positioning PulteGroup for future growth. He also pointed to Florida as one of the company’s strongest markets, where orders rose 19% year over year, attributing the strength to jobs, lifestyle appeal, and demand from both retirees and working families.

Operational Performance

Home sale revenue fell 11% year over year to $3.8 billion, driven by an 8% decline in home closings to 6,997 units and a 3% decrease in average sales price to $544,000. The drop in average selling price was attributed to a geographic mix shift, with fewer closings in higher-priced Northeast and Western markets. However, regional performance varied significantly; while demand in the West was softer, orders improved in California and the Pacific Northwest. Demand remained solid across the Midwest and the Carolinas.

Financial Metrics and Liquidity

Home sale gross margin stood at 25%, compared with 27% in the prior-year period. The financial services business generated $37 million in pre-tax income, down from $43 million a year earlier, while mortgage capture held steady at 85%. PulteGroup returned capital to shareholders through a share repurchase program, buying back 3.1 million shares for $373 million during the quarter. The company ended the period with $1.4 billion in cash.

Orders and Backlog

Net new orders increased 6% year over year to 7,536 homes, supported by an 8% rise in community count to an average of 1,074. Active adult demand led growth with a 12% increase in orders, while first-time buyer and move-up buyer orders grew 5% and 4%, respectively. Speculative inventory was reduced to 6,638 homes under construction, representing 44% of total production, a 13% decrease from the prior year. Finished spec inventory improved to approximately 1,400 homes, or 1.3 homes per community, compared to 1.9 a year ago. Land investment totaled $1.4 billion for the quarter and $2.7 billion year to date, with full-year expectations set at $5.4 billion.

2026 Outlook

Management maintained its 2026 outlook, projecting 28,500–29,000 home closings with an average sales price of $550,000–$560,000 in the second half of the year. Gross margins for the third quarter and full year 2026 are expected to remain in the 24.5%–25.0% range. Marshall said the company is "bullish" on both the long-term potential of the U.S. housing market and PulteGroup’s own growth prospects, noting new developments such as The Grow in Orlando and Explore by Del Webb.

What the Numbers Show

The divergence between declining revenue and rising orders suggests that PulteGroup is successfully converting demand into backlog despite pricing pressure. While home sale revenue fell 11% due to lower closings and a 3% drop in average sales price, the 6% rise in net new orders indicates underlying demand remains robust. This pattern, combined with a reduction in speculative inventory and stable mortgage capture, points to a strategic focus on efficiency and long-term pipeline health rather than short-term volume maximization.

Barclays analyst Matthew Bouley has maintained an Equal-Weight rating on PulteGroup while raising the stock's price target. The new target of $123 represents an increase from the previous $112. The rating and target adjustment were disclosed in a recent research note.

Rating and Price Target Details

The decision to maintain the Equal-Weight rating accompanies the revised price target. The table below summarizes the changes:

PulteGroup is listed on the NYSE under the ticker symbol PHM.