Homebuyers Getting More Comfortable with Rates
Homebuyer interest is stirring much earlier than usual, according to the Pulte Group’s top executive, who is optimistic about the upcoming spring selling season.
“There was a noticeable shift in the market in December,” which normally doesn’t happen until late January, says Richard Dugas, chairman, president and chief executive of the Pulte Group.
The Bloomfield Hills, Mich.-based homebuilder sold nearly the same number of homes in December as in November.
“I believe buyers have become a little bit more comfortable with the rate environment that kind of shocked them in the third and early parts of the fourth quarter. They realized that the housing market is still attractive,” he told analysts and investors during a conference call on the company’s fourth-quarter results.
Pulte’s mortgage banking subsidiary originated $2.8 billion in single-family loans in 2013, including $767 million in loans in the fourth quarter.
In response to a question, the company’s chief financial officer Bob O’Shaughnessy said the qualified mortgage rule would reduce originations by less than 5% and more likely around 3% to 2%.
He also noted that Pulte continues to place a heavy emphasis on building communities for move-up buyers as opposed to first-time buyers. “I am confident we can ramp up quickly if we see that consumer return to the market,” he said.