PulteGroup reported a spike in canceled home deals, but analysts see the slump as manageable.
PulteGroup’s results reflect a slide in housing demand as mortgage rates rise to the highest levels since 2002, creating an affordability crunch that’s the worst in decades.PulteGroup Inc. reported plunging demand for its homes and a spike in canceled deals for the third quarter. The shares rose, showing just how the bar has been “lowered” for builders navigating the U.S. housing slump.
PulteGroup’s results reflect a slide in housing demand as mortgage rates rise to the highest levels since 2002, creating an affordability crunch that’s the worst in decades. The slowdown is more severe in western states, especially California, where buyers were already struggling to afford prices before borrowing costs surged.
“Demand clearly slowed in the period as dramatically higher interest rates created financial and psychological hurdles for potential homebuyers,” Ryan Marshall, PulteGroup’s president and chief executive officer, said in the statement.