Shares of PulteGroup (NYSE:PHM) climbed 4.7% on Thursday, following the release of the homebuilder's second-quarter results.
PulteGroup's home sale revenue rose 3% year over year to $2.5 billion. The gains were driven by a 6% rise in closings, to 5,937 homes, which was partially offset by a 3% decline in its average sale price to $416,000.
"Following a period of demand weakness beginning in late March and into April as COVID-19 first impacted the country, new home sales experienced a material acceleration as the second quarter progressed," CEO Ryan Marshall said in a press release.
Despite numerous challenges posed by the coronavirus pandemic, the U.S. housing market has held up relatively well. "The recovery in demand reflects a number of factors, including low interest rates, a restricted supply of existing-home inventory, pent-up demand following the economic shutdown, the appeal of single-family living in a new home, and a desire among some buyers to exit more densely populated urban centers," Marshall said.
Better still, higher loan volumes helped drive PulteGroup's financial services revenue nearly 70% higher to $95 million. This, combined with gross margin expansion and operating cost reductions, helped boost the homebuilder's profits. All told, PulteGroup's adjusted earnings per share surged 34% to $1.15.
PulteGroup ended the quarter in a strong financial position, with $1.7 in cash reserves. Its backlog also improved by 12%, to 13,214 homes, and 13% on a total value basis to $5.8 billion.
Looking ahead, Marshall is optimistic in regards to the health of the housing market. "Given the strength of second-quarter sales, we are encouraged about the back half of 2020," he said.