See which workplaces made this year's list.

2026_GPTW_best-places-by-industry-Construction-PulteGroup,_Inc.

Employees say:"We have an amazing culture. Management inspires, leads by example, and leads with humility. Teams support one another, hold each other accountable, and have each other's backs. Individuals are committed to working hard, growing, and doing the right thing. We are recognized for our contributions and successes. My job is absolutely one of the best parts of my life."

Best Large Workplaces in Construction

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100 Best Places to Work 2026_PulteGroup, Inc.

Fortune 100 Best Companies to Work For

The companies on this annual list make a conscious effort to be supportive, inclusive workplaces.

2025 Best Large Workplaces for Women_PulteGroup, Inc._US1__68a71dfc383bc91cadd06a7f_3

Employees say:"Management consistently demonstrates adaptability to departmental needs and communicates company metrics and initiatives with clarity and transparency. Emotional wellbeing is a core part of our culture, and we're provided with ample opportunities to maintain a healthy work-life balance. Our team is incredibly supportive, always striving to do the right thing and ensuring our division's clients are satisfied. The collective effort and dedication truly make this a great place to work."

100 Best Large Workplaces for Women

2025_GPTW_Construction_Large_PulteGroup, Inc._US1__685d50c0023fa8a026342320_1

Employees say:"I believe Pulte has established a culture that recognizes people as its most valuable asset. The company provides excellent wellness coverage and programs, competitive pay, paid holidays, company-wide celebratory events, and various other initiatives that prioritize its employees."

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GPTW_100BestCompaniesToWorkFor_2025-PulteGroup, Inc._US1__20241210214006_4

Employees say: "This company provides opportunities for employees to grow and develop to be the best employee that they can be. PulteGroup has built a great work culture and team that empowers its employees. Some examples are teambuilding events, great communication, and holiday events."

Leaders in all industries rely more than ever on Big Tech—and appreciate the giants that deliver, at scale, without drama.

GPTW_Women_Large_2024-PulteGroup, Inc._US1__20240830224000_3

Employees say:"The work like balance is unlike anything I have experienced before. You have enough PTO to not worry about using it all quickly. You do not feel like you have to miss moments in your kids/family life due to work."

GPTW-Construction-Large-2024-PulteGroup

Employees say:"I have worked in the new home sales business for 17 years and with 4 other home builders. Pulte has been beyond the best company to work for. Management truly wants you to succeed and is supportive. Everyone is welcoming and I feel as though I am really part of a team. They offer a leadership development program that I was invited to participate in. Upper management and the division president are approachable and easy to talk to, they ask for feedback and value my opinions. I genuinely ENJOY spending my free time with my co-workers and have cultivated many friendships."

Fortune partners with global people analytics firm Great Place to Work to analyze survey feedback representing employees from companies across the U.S.

GPTW Millennials 2024-Large-PulteGroup, Inc.

Employees say:"The people at Pulte are genuinely nice and compassionate. I've never felt so supported in my career as much as I do here. I feel at ease because I am not worried how I will be treated. I don't take for granted the excellence in behavior here."

100 Best Large Workplaces for Millennials

Industries included in the sector are construction and engineering services and homebuilders.

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100 Best Companies 2024-PulteGroup, Inc.

After weathering a difficult year in a nearly frozen housing market, PulteGroup fell seven places from its 2023 ranking. Yet it remains the third largest homebuilder in the U.S., with operations in more than 45 U.S. markets. PulteGroup aims to create affordable housing opportunities; provides mortgage-free homes to wounded veterans through its Built to Honor program; organizes food drives with local pantries; and launches fundraising initiatives for organizations employees care about.&nbsp; &nbsp;The PulteGroup Foundation launched Dollars for Doers in 2022: For every hour an employee volunteers, the foundation contributes the equivalent of up to $25 per hour, for up to 40 hours annually per employee.&nbsp; &nbsp;To bolster the success of its homebuilding operations team, which constitutes 75% of its workforce, PulteGroup offers mentorship and formal training programs, such as its Certified Field Trainer initiative to support trainees for up to six months.

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100 BEST COMPANIES 2023-PulteGroup

One of the largest homebuilders in the U.S. aims to continually improve the employee experience. As a result, nine out of 10 employees want to work at PulteGroup for “a long time.” 
<ul> 
 	<li>The diversity board’s outreach committee has enhanced PulteGroup’s recruitment, hiring, and onboarding efforts with a focus on identifying a large pool of diverse job candidates and building recruitment relationships with HBCUs.</li> 
 	<li>New hires are assigned an onboarding experience partner, responsible for ensuring new team members feel connected to the company.</li> 
 	<li>PulteGroup’s affordable housing committee is piloting a new program, Hope to Home, that will subsidize a percentage of the homes the company builds, offering them to first-time buyers in underserved groups.</li> 
 	<li>The company has a one-stop learning management system that provides employees with training, workshops, and developmental tools.</li> 
 	<li>PulteGroup’s new health and wellness program goes beyond physical and emotional health coverage to include financial and social wellness.</li> 
</ul>

GPTW Women 2023-PulteGroup, Inc.

Employees say: 
 
"Everyone on the team cares about doing a great job, taking care of each other, and doing what is right for our customers. There’s a high level of work ethic and pride from everyone."

Fortune partnered with Great Place to Work to analyze survey feedback representing nearly half a million U.S. employees.

GPTW Millennial Large 2023-PulteGroup

Employees say: 
 
"Every single employee seems genuinely happy to work at PulteGroup, Inc. I think I can speak for most, if not all, of us when I say we feel like this company and our superiors care about our happiness. I feel seen as something more than just an employee. My managers are happy in their roles and are great leaders. The opportunity to volunteer and have a day off to do so is so special. This company cares for our community, and I feel a massive sense of pride over it."

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

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When it comes to supporting employees, flexibility, diversity, and a few extra paid days off go a long way.

100 Best 2022 PulteGroup,-Inc._1274415-5

America’s third-largest homebuilder has a laser focus on diversity, equity, and inclusion. PulteGroup created internal committees to work on recruiting and training a diverse talent pool of employees and to sponsor cultural awareness programming with live, interactive webinars that spotlight the achievements of a diverse range of individuals. Externally, in keeping with the company’s values, PulteGroup is working to create homeowning opportunities for lower-income families and minorities through affordable housing and down payment assistance initiatives. Part of the company’s emphasis on inclusion includes a flexible workweek. Once fully implemented, employees will work in the office two days per week and remotely for the other three.

Great Places to Work in Construction Large-2022-PulteGroup, Inc._1274415-5

Employees say: 
 
“This team is like a big family, and it is a lot of fun to be able to work with all of them. We have a strong bond and its great to feel like my work makes a difference. This is the only place I have worked that truly shows how much they appreciate our hard work and what we do.”

GPTW Women 2022-PulteGroup, Inc

Employees say: 
 
“Pulte offers a lot of development and growth opportunities that help you grow and advance in your career. There is a large focus on recognition and connection, even in a hybrid environment. I have been impressed with our increased efforts on diversity and inclusion the past couple of years and the launch of our BRGs and women in leadership series.”

To determine millennials' workplace preferences, Fortune's research partner Great Place to Work analyzed feedback representing more than 6.1 million U.S. employees.

GPTW 2022 Millennials List Large-Pulte Group

Employees say: 
 
“I have said this before and I’ll say it again, I feel blessed to be with a company who is not always thinking of the bottom line. Keeping people safe when weather is bad, during a pandemic making sure we had the essentials, and listening to its employees when they chime in with ideas. I have several close friends working for other builders and they cannot say the same. I’m a proud Pulte employee!”

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100 Best Companies 2021-76-PulteGroup,-Inc.

The homebuilder was hit hard by the pandemic, which forced it to make painful staff reductions in the form of furloughs and layoffs. In response, PulteGroup CEO Ryan Marshall, his direct reports, and the entire board of directors took pay cuts, raising $400,000 for a relief fund aiding those who lost their jobs. In the end, the company was able to bring back 100% of furloughed employees within 60 days, and actively set about rehiring those who were laid off. Marshall has also made a commitment to improving PulteGroup’s diversity practices, forming an internal diversity and inclusion board meant to hold the organization accountable to its goals.

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Best-Workplaces-Women-2021-Large-PulteGroup,-Inc

Employees say: 
 
“The company is always making an effort to recognize its employees and show their appreciation. The CEO knows front-line employees by name and makes an effort to build relationships with employees at all levels of the organization.”

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-284-PulteGroup

Started by 18-year-old homebuilder Bill Pulte in 1950, PulteGroup is now the third-largest home construction company in the U.S. based on number of homes closed. Its brands include Del Webb and Centex.

We surveyed tens of thousands of employees to create this list of millennials’ favorite workplaces.

Best Large Workplaces Millennials 2021-PulteGroup,-Inc

Employees say: 
 
“My managers trust me to get the job done well, and as result, I have incredible opportunity and flexibility. I trust my team, and they too enjoy complete flexibility and opportunity. Together - we always WIN! This is truly a Great Place to Work!”

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

Best Workplaces Women 2020-PulteGroup

Employees say: 
 
“People are genuinely interested in my career advancement. I've been mentored and challenged, which directly resulted in several promotions. This is truly a team where people care for each other and look for ways to build them up to promote.”

This year's Fortune 500 marks the 66th running of the list.

F500-2020_309_PulteGroup

The Atlanta-based homebuilder, whose brands include Del Webb and Centex, is considered the third-largest home construction company in the U.S. based on the number of homes closed. It operates in more than 40 markets.

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Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Fortune Global 500

Best Companies

Rank last year

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U.S. job openings

Year founded

Benefits

Subsidized childcare

Compressed work weeks

Option to work remotely

Minimum requirement in-office attendance (days per week)

Mental health coverage

Free mental health sessions (per year)

Free backup childcare time off (days)

Maximum $ amount covered for fertility services

Fully paid maternal leave (days)

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Best Workplaces In Construction

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# Work Sites

PulteGroup is one of the largest homebuilders in the U.S., having constructed over 800,000 homes since 1950. The company operates in more than 45 markets across 24 states through its portfolio of brands, including Centex, Pulte Homes, Del Webb, DiVosta Homes, American West, and John Wieland Homes and Neighborhoods.

Q3 2026

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PulteGroup (PHM): Company Profile, Stock Price, News, Rankings

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PulteGroup

pultegroup

Hello, everyone. Thank you for joining us, and welcome to the PulteGroup Inc Q3 2026 earnings conference call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Jim Zeumer, Vice President. Jim, please go ahead.

Thank you, Erica, and good morning. I want to thank you for joining today's call as we look forward to discussing PulteGroup's third quarter operating and financial results. On today's call, I'm joined by Ryan Marshall, President and CEO, Jim Ossowski, Executive Vice President and CFO, and David Carrier, Senior Vice President, Finance. A copy of our earnings release and this morning's presentation have been posted to our corporate website at pultegroup.com. We will also post an audio replay of this call later today. I would highlight that today's presentation includes forward-looking statements about the company's expected future performance. Actual results could differ materially from those suggested by our comments today. The most significant risk factors that could affect future results are summarized as part of today's earnings release and within the accompanying presentation slides.

These risk factors and other key information are detailed in our SEC filings, including our annual and quarterly reports. Now let me turn the call over to Ryan.

Thanks, Jim, and good morning. I'm very proud of the business results our organization has delivered thus far in 2026. In a world where we can't control global events or macroeconomic conditions, we can manage how we respond to the operating environment. To that end, I think PulteGroup continues to do an excellent job navigating today's evolving market dynamics and doing so in a way that is consistent with our long-term operating strategies. We continued this approach in the third quarter as we remained disciplined in our business practices and focused on delivering an outstanding home buying experience within a period that underwent meaningful change. To the former, in the third quarter, we delivered almost 7,000 homes, maintained our focus on delivering strong gross margins and overall solid returns while increasing our backlog and returning nearly $400 million back to our shareholders.

As to the latter, consistent with all the reporting and commentary swirling around the current state of the U.S. housing industry, we experienced a notable slowdown in home buying demand as we moved through the third quarter and interest rates surged higher. The reality that buyer demand slowed through the quarter won't be news to anyone on this call. What I think is interesting, however, is exactly how buyers responded. Based on feedback from our sales associates, in the third quarter, they were routinely working through these important customer issues. Buyers are spending more time getting comfortable with the higher monthly payments, interest rates, and financing options before moving forward. The need to sell an existing home remains one of the most significant conversion barriers. Buyers have clear expectations regarding lot characteristics, home functionality, and overall fit.

In other words, they are taking advantage of market conditions to be very particular in what they're willing to pay for. Finally, timing often appears to be a symptom rather than the true obstacle. In many conversations, our sense is that not ready yet is really about financing or existing home sale readiness rather than timing itself. The most interesting point with these comments, they really haven't changed very much from earlier in the year when interest rates initially started moving higher. Prospective buyers continued to have concerns about stretched affordability, high monthly payments, and home sale contingencies. Our sales teams were able to help buyers solve these challenges such that our conversion rates in the third quarter were comparable to the first two quarters of 2026.

If the buyer issues haven't changed and we're still able to convert prospects at a similar rate, why the meaningful deceleration in reported sales? What changed in the quarter, and most notably in September, is that the big move higher in interest rates, along with inflation, global tensions, and waning confidence, reached the point where more consumers simply put their search on pause. In the third quarter, our customer conversion rates were relatively stable, but traffic to our communities was down 14% from the prior year, and on a sequential basis, down 11% from the second quarter. These conditions have continued through the first few weeks of October. As you would expect, most of the missing traffic were first-time buyers as this group remains the most impacted by higher interest rates.

Not only did this pronounced slowdown among our first-time buyers impact our third quarter sign-ups, but it also directly impacted our closing volumes for the quarter as the majority of our spec sales are within our first-time buyer communities. We have done a great job controlling starts and in turn, spec inventory, but the impact of having fewer finished spec sales reduced our home closings in the third quarter. I fully appreciate that this isn't a very upbeat message for an earnings call, but it's important to acknowledge that the change in the market conditions over the past 30-45 days when discussing PulteGroup's results for the quarter and the year to date.

Consistent with previous quarters, in the third quarter, we focused on serving what we consider core home buying demand rather than chasing volume in a market showing little price elasticity. You can see this in PulteGroup's reported Q3 financial results, as closings came in slightly below our guide, but a strong reported gross margin of 24.8% helped the company to deliver earnings of $476 million, or $2.53 per share. Through the first nine months of 2026, PulteGroup delivered just shy of 20,000 homes and generated $11 billion of home sale revenues. Operating within this year's more competitive market conditions, we have appropriately managed price and pace to capture sales, while driving year-to-date gross margins and operating margins of 24.7% and 14.2%, respectively.

In alignment with our capital allocation priorities, our strong nine-month financial results supported investment of $4 billion into land acquisition and development, and the return of $1.2 billion to shareholders through share repurchases and dividends. I will provide more detail on how we are navigating current demand dynamics later, but first, let me turn the call over to Jim Ossowski for a detailed review of PulteGroup's third quarter financial performance.

Thank you, Ryan, and good morning. In what was a challenging quarter for U.S. housing, our financial results once again show the value of our more diversified and balanced operating platform. Let us get started. Our net new orders in the third quarter totaled 6,208 homes, which is a decrease of 6% from the third quarter of last year. Reflective of Ryan's comments about lower consumer traffic, the decrease in Q3 net new orders was driven by a 13% decrease in absorption pace, partially offset by a 7% increase in average community count of 1,077 for the quarter. In the third quarter, our cancellation rate as a percentage of starting backlog was 10%, which is down from 12% last year and down 50 basis points from Q2 of this year.

Even in today's dynamic demand environment, these relatively stable cancellation rates suggest that customers under contract remain committed to closing on their home. Our absorption pace for the third quarter was 1.9 homes per month, which compares with an absorption pace of 2.2 homes per month last year. Absorption pace was lowest in September, as interest rates surged higher throughout the month. Our lower absorption pace is a consequence of the drop in prospective buyer traffic to PulteGroup communities. By buyer group, net new orders in the third quarter among first-time and move-up buyers were down 9% and 14%, respectively, from last year. Once again, we benefited from our leadership position serving active-adult consumers, as Q3 sign-ups among those buyers were up 11% over last year. The slower sales among move-up buyers reflect, in part, ongoing weakness within this buyer group in our Texas and West operations.

Within our active-adult business, we continue to benefit from our prior year land investments as the increase in net new orders was the result of ongoing community count growth. Over the past five years, we have grown our active-adult community count by almost 20%, and we look to increase market share even further with the ongoing rollout of our new Explore by Del Webb brand. PulteGroup's third quarter home sale revenues totaled $3.9 billion, which is down 9% from last year's third quarter revenues of $4.2 billion. Lower revenues for the quarter were primarily the result of a 9% decrease in closing volumes to 6,876 homes. Q3 closing volumes were negatively impacted by rising interest rates and reduced consumer confidence, as we sold a fewer number of spec homes that we were expecting to sell and close within the period.

By buyer group, third quarter closings break down as follows. First-time and move-up were both 38%, while active-adult accounted for 24% of closings in the period. Closings in the third quarter of 2025 were comprised of 39% first-time, 39% move-up, and 22% active-adult. On a year-over-year basis, third quarter backlog was higher in both units and value. We ended this year's third quarter with a backlog of 10,298 homes, valued at $6.4 billion, compared with prior year backlog of 9,888 homes with a value of $6.2 billion. At the end of the third quarter, we had 14,599 homes in production, of which 6,627 or 45% were spec homes.

Our divisions have done an excellent job managing production, as total specs are down 10% from the same period last year, while finished specs are down 16% from last year to 1,696, or an average of 1.6 finished spec homes per community. While our current spec inventory level is right-sized, we continue to tightly control our starts pace to align production with changing demand dynamics. In the third quarter, we started just over 6,500 homes during a period in which we sold 6,200 houses. Based on backlog, homes under construction, and recent trends in the pace of spec sales, we now expect to close between 7,000 and 7,500 homes in the fourth quarter. We still have to sell and close a number of spec homes to achieve the guide, so we'll be closely assessing buyer demand and taking the appropriate steps needed to convert spec inventory into closings.

Further, given the expected Q4 closings, we now anticipate full-year closings to be in the range of 27,000-27,500 homes. Based on the mix of homes we anticipate closing in the fourth quarter, we are still guiding our average sales price and closings to be in the range of $550,000-$560,000 in the fourth quarter and for the full year. Based on prior year land investments, we came into 2026 expecting year-over-year community count growth of 3%-5% for each quarter. Our average Q3 community count of 1,077 was up 7% over last year. The higher growth rate realized in Q3 reflects the slower closeout of existing communities in the period. We are still forecasting year-over-year community count growth of 3%-5% in the fourth quarter, but fewer community closeouts in the period could again elevate the percentage growth rate.

Consistent with our previous guidance, our reported third quarter gross margin was 24.8%, which is down 140 basis points from last year and down 20 basis points sequentially from Q2 of this year. Our reported third quarter gross margin is inclusive of incentives of 10.4%, as well as $26 million or 70 basis points of land impairment charges recorded in the period. In the comparable prior year period, incentives were 8.9%, and we recorded $17 million of land impairments. On a positive note, our national and divisional procurement teams continue to do an excellent job working with our trades and product suppliers to manage construction costs. Pulte's third quarter build costs were $75 per square foot, which is down 5% from last year and flat with the second quarter of 2026.

Taking into consideration our backlog, current demand conditions, competitive market dynamics, and the need to cycle through existing spec inventory, we expect fourth quarter gross margins to be in the range of 24.0%-24.5%. Given our Q4 margin guide, we are maintaining our guidance for full-year gross margin to be in the range of 24.5%-25.0%. SG&A expense for the third quarter was $397 million, or 10.3% of home sale revenues. In Q3 of last year, SG&A expense was $401 million, or 9.4% of home sale revenues. With higher interest rates pressuring consumer demand and the potential that rates remain elevated for longer, we remain focused on controlling overhead expenses while still delivering superior build quality and an outstanding home buying experience.

Still, given our updated forecast for fewer closings this year, we now expect full-year 2026 SG&A expense to be in the range of 10.3%-10.5% home sale revenues. Our financial services operations reported third quarter pre-tax income of $46 million, which is up slightly from last year's pre-tax income of $44 million. Mortgage capture rate in this year's third quarter was 85%, compared with 84% last year. PulteGroup's reported pre-tax income for the third quarter was $625 million, and our tax expense for the period was $149 million, or an effective tax rate of 23.9%. Our effective tax rate benefited from energy tax credits recorded in Q3. For the fourth quarter, we expect our tax rate to be approximately 24.5%, assuming no discrete period-specific tax events. Q3 reported income was $476 million, or $2.53 per share.

In the third quarter of 2025, we reported net income of $586 million, or $2.96 per share. Pulte's Q3 earnings per share was calculated based on 188 million diluted shares, which was down 5% from the prior year as we continue to allocate capital to systematically repurchase outstanding shares. In Q3 of this year, we repurchased 2.8 million common shares for $350 million, or an average price of $124.70 per share. Over the first nine months of 2026, we repurchased 8.4 million common shares for $1 billion, or an average price of $123.51 per share. While market conditions can make underwriting land transactions more difficult, we were successful in investing $1.3 billion in land acquisition and development in the third quarter, of which 51% was for the development of our existing land assets. Year to date, we have invested $4 billion in land acquisition and development.

We now expect to invest approximately $5.3 billion in land for all of 2026. Inclusive of land transactions completed in the period, we ended Q3 with approximately 224,000 lots under control. Total lots under control are down 16,000 from the third quarter of last year and down 4,000 lots sequentially from Q2 of this year. We continue to underwrite new land deals, but we are also walking away from select option transactions that may no longer meet risk-adjusted return thresholds. In the third quarter, we elected to walk away from approximately 8,000 lots previously held under option. As we have discussed on prior calls, we view lot options as a tool to both improve project returns and to help mitigate market risk. One without the other really provides PulteGroup with limited, if any, value.

Reflecting on our differentiated approach to the lot options, at the end of Q3, over 85% of PulteGroup's land options were with underlying land sellers. The rest of our options are structured as one-off transactions with a select number of land bankers. At the end of the quarter, we had 55% of our lots held under option. Lastly, when it comes to optioning dirt, we continue to solve for the best business outcome on a deal-by-deal basis, rather than simply targeting an option lot percentage. Given our operating results for the first nine months of 2026, we still expect the operating cash flow generation for the full year to be approximately $1 billion. Finally, we ended Q3 with $1.4 billion of cash, and debt to capital ratio of 12.1%. Adjusting for the cash balance, our net debt to capital ratio at quarter end was 3%.

Now, let me turn the call back to Ryan for some final comments.

Thanks, Jim. This latest increase in interest rates has forced more consumers to the sidelines and worked to make overall operating conditions more challenging. While higher rates made demand conditions in the third quarter generally more competitive throughout the country, our geographic diversity again proved incredibly valuable. In the third quarter, we continued to see outperformance in our Florida operations and key markets in the Midwest. Better performance in these markets helped to offset softer demand in other areas of the country, including markets in the Southeast and ongoing weakness out West. Looking beyond the quarterly earnings, I believe in the fundamental strength of long-term housing demand. Across all the generations and populations, the desire for homeownership remains as high as ever, as the financial and emotional underpinnings are too compelling to ignore.

I also believe that after months of mortgage rates above 7%, consumers could view even a modest pullback in interest rates as reason enough to reengage in the home buying process. Although I acknowledge that it may take more than just a move lower in interest rates, as consumer confidence is weighed down by rising fuel costs and fears about ongoing inflation and conflict in the Middle East. While a quick re-acceleration in home buying activity is certainly possible, the reality is that higher interest rates pressured industry-wide new home sales in September, and the potential for interest rates to stay higher for longer is clearly present. As such, I think it's helpful to discuss how we're assessing market opportunities and challenges.

First, our diversified operating platform offers tremendous advantages as we can capitalize on the stronger markets and consumer groups to help offset any weakness in other parts of the business. Second, consistent with our demonstrated operating practices, we remain focused on serving core demand rather than shedding margins in pursuit of less profitable, low-returning volumes. Obviously, we must turn assets, but sometimes lowering price doesn't generate incremental sales. Rather, it just makes all your home sales less profitable. Third, we have a robust and well-structured land pipeline. We are on track to invest $5.3 billion in land acquisition and development this year. If conditions warrant, we are fully prepared to reduce land spend in 2027. Further, given the very intentional way we have structured our controlled lot positions, we can and will walk away from option lots that no longer meet return hurdles.

Finally, PulteGroup's balance sheet provides tremendous strength and financial flexibility. With $1.4 billion in cash and net debt to capital of only 3%, not only can we weather tough times, but we can capitalize on market opportunities should they develop. Last week, we had our quarterly operations reviews with my senior team, along with our four area presidents and the president of Pulte Financial Services. Beyond just reviewing Q3 results, the field leaders had already developed action plans, and where appropriate, are already taking steps to respond to the changing market dynamics. I can't overestimate the value of having an experienced leadership team that can quickly assess and adjust. I want to thank them and the entire PulteGroup organization for the operating and financial success they delivered in the third quarter, and for their efforts to ensure our company's success going forward.

Now, let me turn the call over to Jim Zeumer.

Okay. Thanks, Ryan. We're now prepared to open the call for questions. So we can get to as many questions as possible during the remaining time of this call, we ask that you limit yourself to one question and one follow-up. Erica, we're prepared to start Q&A.

We will now begin the question-and-answer session. As a reminder, if you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Alan Ratner with Zelman. Your line is open. Please go ahead.

Hey, guys. Good morning. Thanks for all the detail, and nice job in a tough market. Appreciate the color on the traffic during the quarter. I was hoping to dig in a little bit more on some price point trends that you're seeing. You're recognizing that both move-up and active-adult, I think, have been relative outperformers for quite a while now. Did you see the same magnitude of traffic pullback at those price points? Or are you seeing maybe differences in behavior between the move-up and active-adult buyers versus entry-level right now, given the recent rate move?

Yeah, Alan. Good morning. Thanks for the question. Definitely all buyer groups felt it, but the first-time, it was outsized impact there. I don't think any buyer group is totally immune, but the move-up and the active-adult certainly fare better, especially, given a lot of those buyers in our world pay cash. They're less rate sensitive than the first-time buyers, which largely 100% need a 30-year mortgage or some kind of mortgage.

Got it. Makes sense. On the gross margin guide, obviously a little bit of pressure sequentially, but not too much. I am just curious, with incentives flat on closings, could you talk a little bit about what you are doing on orders right now? Ultimately, how high are you willing to take that number if rates don't pull back at all in the next year's spring selling season? Or how should we think about just the price versus volume interplay next year?

Yeah, Alan, I think the way I would address that is, and we tried to address it in our prepared remarks, that we are seeing inelasticity in price right now. A lot of incremental discount above and beyond where we are at doesn't necessarily generate a whole bunch of incremental sales that creates economic benefit from the incremental sales. We definitely do focus on inventory turn, and that's a critical component of how we operate. So, there is a point at which you say we have to lean in more in order to turn inventory, but we are quite a bit above those levels. With that in mind, we are really looking at if we are going to lean in with more incentives, does it truly generate incremental sales volume?

If the answer is no, we think the much better economic outcome for our company and our shareholder is to stay in the ballpark that we are right now. Our margin certainly benefited in the most recent quarter because we sold less spec, and generally, that final spec inventory is where there are higher incentives. So, a little bit of a double-edged sword in the third quarter. The less spec inventory sales help margin, but it hurt us on the volume side. As we move into the fourth quarter, we have factored in some of the incremental discounts that we would expect to give on the spec inventory, and that's all baked into the margin guide that we have given for the quarter and the full year.

Great. Appreciate all the detail. Thanks a lot.

Your next question comes from the line of John Lovallo with UBS. Your line is open. Please go ahead.

Good morning, guys. Thanks for taking my questions as well. The first one is, two of your competitors had talked about a little bit of incremental pressure from the existing home market as folks who are willing to be a little bit more competitive on pricing after waiting for three or four years to sell. Curious if this had an impact on your move-up segment in particular. Then maybe conversely, if this did in fact happen, is this a positive in the sense that it sort of restarts the flywheel on the housing value chain? It could actually result in a better year as we move forward, perhaps.

John, I think there's a few anecdotal markets where maybe you saw some movement in price, but the environment that we've been living in and we continue to live in is that pricing between new and resale is almost on top of one another. In fact, in some cases, resale is more expensive than new, which is a phenomenon that I don't think we've seen often in the 25 years that I've been in this business. So, I don't know that I would necessarily 100% agree that we've seen a big unlock in resale pricing going lower. I do agree with you that the resale market freeing up does restart the flywheel, and that's been a consistent comment that we've been making for the better part of a year and a half.

The thing I would comment on, and I touched on it and so did Jim, one of the biggest impediments that we're seeing right now is that our move-up and active-adult buyers need to sell their existing home, and that is tough. Part of the reason it's tough is because the prospective buyer that's going to buy their home is faced with a 7.5% interest rate, and they don't have the ability to tap into the bought-down mortgage rate like we can offer. So there's definitely some headwinds out there as it relates to resale market and the new home market that is largely centered around 7.5% interest rates. We can certainly address some of that, and we are with our bought-down rate, but it's hard to reach over the fence and help address the challenge on the resale side.

PulteGroup (PHM) Q3 2026 Earnings Call Transcript

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