Pultegroup posts lower Q3 profit, warns tariffs to lift build costs in 2026

By Aatreyee Dasgupta

Oct 21 (Reuters) - Homebuilder Pultegroup PHM.N on Tuesday posted a 16% fall in third-quarter profit as buyer incentives squeezed margins, and warned that tariffs could add roughly $1,500 per home to build costs starting in 2026.

Shares of the Atlanta-based homebuilder fell 5% in early trading hours.

Headwinds from persistent inflation and resulting affordability pressures have pushed U.S. builders to rely on mortgage-rate buydowns and smaller homes to keep deals moving, a strategy that supports sales but weighs on profitability.

CFO James Ossowski said during an earnings call on Tuesday that while tariffs on construction materials will have "little to no impact" on fourth-quarter closing, but cost pressures could begin affecting homes built next year.

The company will "continue to monitor buyer demand that has been impacted by weaker consumer confidence and ongoing affordability challenges," said Ryan Marshall, the company's chief executive, noting the recent interest-rate cut was a positive development.

Quarterly net new orders totaled 6,638 homes, a decrease of 6% from the previous year's net new orders of 7,031 homes.

Pultegroup earned $585.8 million, or $2.96 per share in the quarter ended September 30, compared with $697.9 million, or $3.35 per share, a year earlier.

Analysts on average expected profit of $2.89 per share, according to LSEG data.

Third‑quarter revenue slipped 1.6% to $4.40 billion, versus estimates of $4.31 billion.