© Reuters. FILE PHOTO: Houses are seen in Livingston Square, a construction of the PulteGroup, in Livingston, New Jersey, U.S., May 23, 2022. REUTERS/Andrew Kelly/File Photo
(Reuters) – PulteGroup (NYSE:) missed Wall Street estimates for fourth-quarter revenue on Tuesday, as it sold fewer homes at lower prices to offset a hit to demand from higher mortgage rates.
The 30-year fixed mortgage rate rose to nearly 8% in the fourth quarter, the highest in two decades, prompting potential homeowners to put off their purchase plans.
Pulte reported revenue of $4.29 billion, missing expectations of $4.47 billion, according to LSEG data.
The third-largest U.S. homebuilder by volume sold 7,615 homes in the quarter, down 13.9% from the prior year, and reported a 2.5% drop in average selling prices. Homes sold were also below the company’s estimate of 8,000.
Its gross margins of 28.9% also came in below its forecast of 29-29.5%, mirroring a similar trend at D.R. Horton.
Atlanta-based Pulte reported net income of $3.28 per share, compared with analysts’ average estimate of $3.22 per share.
The company also said it would buy back shares worth $1.5 billion.
Shares of the company fell 1% to $105 in premarket trading.
