(Reuters) – Homebuilder PulteGroup beat Wall Street estimates for first-quarter profit and revenue on Tuesday, aided by strong demand for new constructions amid an acute shortage of existing homes.
With the popular 30-year fixed mortgage rate hovering at about 7% for months, U.S. homeowners who secured fixed rates below 5% during an era of cheap debt remain unwilling to list their homes and buy a new one with a higher interest rate.
The ‘rate lock-in’ that such homeowners are enjoying has constrained sales of existing homes in the United States, forcing buyers to turn to newly constructed homes.
It has been a tailwind for homebuilders, even at a time when high home prices have limited affordability.
The Atlanta, Georgia-based homebuilder reported a first-quarter profit of $3.10 per share, above analysts’ average estimates of $2.36, according to LSEG data.
Home sales revenue for the quarter came in at $3.82 billion, above analysts’ estimate of $3.58 billion, reflecting an 11% increase in closings to 7,095 homes.
(Reporting by Ananta Agarwal and Kannaki Deka in Bengaluru; Editing by Maju Samuel)
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