PulteGroup continued its efforts to shift toward a greater built-to-order mix in the fiscal second quarter, reducing spec inventory and lowering starts during the period. During its second quarter earnings call, president and CEO Ryan Marshall reiterated the belief that a higher mix of built-to-order sales among move-up and active adult buyers is the best long-term value plan for the No. 3 company on the 2026 Builder 100 list.
“[Move-up and active adult buyers] are individuals who expect choice and our operating model allows them to choose their preferred lot and select the options and upgrade they desire,” Marshall said during the call. “Our field teams were excited to execute this strategy, as it affirms our build cycle has fully recovered from the global supply chain disruptions that hit the industry after COVID. Our decision to build more spec homes when the supply chains collapsed and build cycle times effectively doubled was the right one at the time, but we much prefer having a growing backlog of sold homes.”
In the quarter, built-to-order sales increased to 45% of new orders in the quarter, moving closer to PulteGroup’s long-term target of 60%. Additionally, the builder reduced its finished spec inventory to 1.3 homes per community at quarter end. While PulteGroup generated 15,570 new orders through the first six months of the year, the company intentionally only started 14,378 homes. Given a build cycle time that is at or lower than 100 days, Marshall said the company can manage its starts pace while still meeting production goals.
“At the end of 2024, we had approximately 8,800 spec homes in production. By the end of 2025, we had lowered this number to 7,200 specs and we are now down to approximately 6,600 specs in production. I would note that we’ve achieved this dramatic reduction in spec inventory while growing overall community count,” Marshall said.
Quarterly Results
In the second quarter, home sale revenues declined 11% to $3.8 billion, reflecting an 8% decrease in closing volumes to 6,997 homes and a 3% decrease in average sales price to $544,000.
“Mix was a meaningful driver of our lower average sales price, as we realized fewer closings out of our Northeast and West operations, which represent our two highest priced operating geographies,” executive vice president and chief financial officer Jim Ossowski said. “Second quarter closings by buyer group were 41% first-time, 37% move-up, and 22% active adult, comparable to 39% first-time, 41% move-up, and 20% active adult [last year].”
New orders in the quarter increased by 6% year over year to 7,536 homes, driven by higher community count. Across first-time, move-up, and active adult buyers, net new orders increased 5%, 4%, and 12%, respectively. Community count increased 8% over the second quarter of 2025 to 1,074.
“The second quarter demonstrated a typical seasonal demand pattern. Sales and absorption paces eased from month to month during the period,” Marshall said. “I think it’s fair to say consumer activity was impacted to varying degrees by global tensions, macroeconomic uncertainty, and the material movement of interest rates. Still, we were able to drive higher orders in the period with strong performances across all buyer groups.”
In the quarter, Marshall said buyers expressed a willingness to pay for superior locations and upgrades. Options and lot premiums on homes closed in the period was nearly $17,000, according to Marshall. The builder also realized a 50 basis point sequential decrease in incentives during the second quarter.
“The mix of Q2 closings contributed to the improvement of this metric,” Ossowski said. “Specifically, we benefited from a greater mix of closings from our higher margin Florida market in combination with lower than anticipated discounts on the homes sold and closed within the quarter.”
PulteGroup ended the quarter with a backlog of 10,966 homes, a 2% increase compared to the second quarter of 2025.
The company reported a profit of $472 million, or $2.48 per share, down from $608 million, or $3.03 per share, in the same period a year ago.
Market Consolidation
At the end of the earnings call, Marshall commented on ongoing consolidation in the industry given Berkshire Hathaway’s $8.5 billion acquisition of Taylor Morrison, Stanley Martin Homes’ acquisition of Holiday Builders, and Dream Finders Homes’ pursuit of Beazer Homes. The year has also seen public companies United Homes Group and Tri Pointe Homes taken private through acquisitions.
“When it comes to assessing M&A opportunities, before we even run the numbers the first question we ask ourselves is: Will this transaction make us better, not just bigger?” Marshall told investors on the call. “Integrating businesses, organizations, and cultures is hard work. So, we have to see the value in terms of the transaction truly enhancing our business.
Marshall said PulteGroup primarily sees acquisitions as a way to buy land and the company underwrites deals accordingly. Additionally, he said the company favors smaller, tuck-in transactions to build local market scale rather than large, multi-market acquisitions.
“Based solely on the public comments I’ve read about [recent] transactions, I think they point to a growing recognition of scale, particularly local market scale,” Marshall said. “I believe the improved access to land and labor that comes with scale is critical to a home builder’s long-term success in any given market.”
