LOS ANGELES (AP) â¿¿ PulteGroup Inc., the nation's largest homebuilder, said Wednesday it returned to a quarterly profit for the first time in more than three years, as revenue surged amid a rush by Americans to complete their home purchase in time to qualify for federal tax credits.
The builder's acquisition of rival Centex Corp. last year was key, bolstering its inventory of homes geared for first-time buyers, many of which seized on the government incentives to become homeowners.
CEO Richard J. Dugas Jr., said buyer demand fell after the tax credit expired in April. It has since been stable, but well below normal levels."At this point, we still feel that we can be profitable for the year, but given the pullback in demand, it's going to be a steeper hill than we thought," Dugas said. Shares slipped 5 cents to close at 8.38 Wednesday. The tax credits helped spur buyers back into the market last year and again this spring, boosting sales for homebuilders slogging through the worst real estate downturn in decades. But since the incentives expired on April 30, the number of people looking to buy has dropped, even with the availability of the lowest mortgage rates in decades. Sales of new U.S. homes jumped in June, but it was the second-weakest month on record. High unemployment, slow job growth, and tight credit, meanwhile, continue to keep many people from buying homes. "Beyond the immediacy of any tax credit impact, for the industry to experience meaningful and sustained rebound we need a stronger economy, job creation and better consumer confidence," Dugas said. "Right now the industry's biggest issue is a lack of buyers." PulteGroup's latest results were in line with other builders who also saw revenue jump as they completed deals on homes purchased before April 30. Buyers initially had until June 30 to complete their purchase and qualify for the tax credits, although lawmakers later extended that deadline to Sept. 30.