Pulte Continues to Raise Prices on New Homes

The recent increase in mortgage rates has not materially affected the demand for new homes, according to the chairman, president and chief executive of Pulte Group, Richard Dugas.

Despite the increase in rates, “not much has changed in the macro housing market,” Dugas told Wall Street analysts during a conference call Thursday morning.

The homebuilder stressed that the recovery in the housing market is based more on the tight supply of new and existing homes than a dramatic increase in homebuyer demand.

However, increases in home prices and mortgage rates have helped to “create a sustained sense of urgency among prospective buyers who are now more anxious to buy a home,” he said.

Pulte sold 4,152 new homes in the second quarter, up 9% from a year ago. The average selling price was $294,000, also up 9% from the second quarter of 2012.

The Bloomfield Hills, Mich.-based builder ended the second quarter with a backlog of 8,558 orders valued at $2.7 billion.

Dugas noted that the Pulte Group, which includes the Del Webb and Centex brands, continues to “meter” or constrain sales to achieve higher returns on sales.

“In the past 90 days, Pulte has raised prices in at least 50% of the open communities,” he said. These price increases range from 1% to 5%.

Pulte Mortgage reported pretax income of $16.4 million in the second quarter on originations of 2,800 loans totaling $643.3 million. The loan count was up 8% from a year ago.