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Pulte shifts more orders to build-to-order as margins firm up

In Q2, build-to-order reached 45% of orders, while Pulte said gross margin improved to 25% and cycle times hit 100 days.

Reported · Written up by our desk · Residential

PulteGroup is leaning further into build-to-order home sales as it seeks to support margins and cut reliance on speculative builds, HousingWire reports. The company has been working to rebalance its product mix toward a long-term target of about 60% build-to-order and 40% spec homes.

In the second quarter, build-to-order represented 45% of orders, with cycle times around 100 days, the outlet said. Pulte also reported gross margin improving to 25%, even as revenue and average sales price declined year over year, HousingWire added.

HousingWire said Pulte’s strategy is aimed especially at move-up and active adult buyers who want customization, despite rate and average price frictions that have tempered broader demand. The builder said orders increased across buyer groups, margins remained resilient, and units in backlog rose.

Pulte said it is making progress on operational benchmarks, including keeping finished spec homes per community between 1.0 and 1.5, with it at 1.3 by quarter end. HousingWire also noted the company expects to reach its 60% build-to-order mix sometime next year after having an order mix of 45% build-to-order and 55% spec in Q2.

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