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February 8, 2011
U.S. homebuilder PulteGroup sees closings, orders decline
BLOOMFIELD HILLS, Mich.
PulteGroup Inc.’s fourth-quarter loss widened, as the homebuilder’s results were dragged down by hefty charges and a decline in closings and new orders.
But the Bloomfield Hills, Mich. company said the housing market is showing signs of stabilizing, with encouraging January buyer traffic and sales trends.
PulteGroup lost US$165.4 million. That compares with a loss of $116.9 million a year earlier.
The quarter included $196 million in land-related charges and costs related to its restructuring, paying down debt and other financing amendments completed in the quarter.
Closings dropped 29 per cent to 4,405 homes in the quarter, while net new orders fell 19 per cent to 3,044 homes. The average selling price edged up 2 per cent to $262,000.
PulteGroup’s backlog fell to 3,984 homes from 5,931 homes.
In recent weeks, KB Home, Lennar Corp., D.R. Horton Inc., and Standard Pacific Corp. all reported sharp drops in home deliveries and contracts for new homes during their latest quarters.
Meritage Homes Corp. bucked that trend, reporting this week a 15 per cent jump in new home orders. Still, its home deliveries sank 30 per cent.
Homebuilders are a a widely followed indicator for the housing market and the economy. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes paid to local and federal authorities, by some estimates.
PulteGroup CEO Richard J. Dugas Jr. said in a statement that the U.S. housing market does appear to be stabilizing, but at historically low levels.
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