PulteGroup Unveils the Second Part of Its Value-Creation Strategy
PulteGroup announced the second phase of its value creation strategy—reducing costs, reducing land investment, and increasing share buybacks.
PulteGroup (PHM) reported net income of $118 million or $0.34 per share. This beat Wall Street analysts’ estimate of $0.33 per share.
PulteGroup’s (PHM) gross margins for 2Q16 came in at 21.5%—down 40 basis points year-over-year and 180 basis points from the fourth quarter.
PulteGroup (PHM) reported 2Q16 revenues of $1.8 billion—a 41% increase from a year ago. Revenues increased in home sales and financial services.
Fannie Mae’s monthly National Housing Survey asked respondents if it’s a good time to buy and sell a house. They’re more confident that it’s a good time to sell.
In May, the total foreclosure inventory fell 25% from a year ago to 390,000 homes. It takes us back to the levels in late 2007.
Last week, stocks rallied and bond yields rose as investors became more sanguine about the consequences of the Brexit.
This week is relatively data-light. However, a slew of reports will interest real estate investors.
In May 2016, there were 5.5 million job openings—up 2% YoY (year-over-year). This is the lowest print since February.
Job cuts in the energy industry seem to be slowing as they fell 42% YoY. The real estate sector, especially home construction, is on an upswing.
Given the terrible growth in payrolls, we might see more flattening of wage inflation back towards the current inflation rate.
In June 2016, non-farm payrolls rose by 287,000. Non-farm payrolls easily topped Wall Street analysts’ estimate of 180,000.
Recently, Mario Draghi pushed European governments to do more in the way of fiscal stimulus. The Fed made similar arguments.
In May, housing starts were unchanged month-over-month at 1.2 million units. Building permits were flat at 1.1 million.
In May, the share of existing home sales attributable to the first-time homebuyer was 30%—an decrease from 32% in April. Historically, this was closer to 40%.
Construction spending fell 0.8% to a seasonally adjusted annual rate of $1.12 trillion in May from $1.14 trillion in April.
In the quarter ending March 31, construction spending as a percentage of the GDP was flat at 6.2%. This was a big rise from a year ago when it was 5.7%.
Mortgage purchase applications fell 3% in the week ending June 24, 2016. We’re at the tail end of the seasonally strong period for house purchases.
New home sales increased to an annualized pace of 551,000—up 8.7% from the same month last year. They were also down about 6% sequentially from April.
At the end of May, there were 2.15 million existing homes for sale. This represents a 4.7-month supply. A level of six to 6.5 months means a balanced market.