Buying a home in America can be difficult.
Homebuilder Pultegroup (PHM) warned in a post-revenue conference call that rising tariff costs will put pressure on home prices and affect all prices in the market.
“We are in the $5,000 range on average, which affects all the prices and consumer groups we serve. There may be some minor nuances, but that may be pretty broad across the spectrum,” Pultegroup CEO Ryan Marshall told investors and analysts for the company’s first quarter revenue call on Tuesday morning.
The caveat was above $2.43 as PHM reported earnings per share in the first quarter of $2.57, resulting in an average analyst estimate. PHM shares rose 6% in early trade on Tuesday following the results.
Despite the revenue beat, home builders faced sales challenges. Pultegroup reported a total of 7,765 homes down 7.3% year-on-year for the first quarter, ending March 31, with a total of 7,765 homes, failing to reach 8,166 analyst estimates. Home closes also fell 7.2% year-on-year to 6,583, missing analysts’ forecast of 6,595 units.
Executives estimate that tariff rise will increase by around 1% in the second half of the fourth quarter, driven by major categories such as plumbing, water heaters, porcelain, HVAC parts from China, tile floors affected by 10% global tariffs, and electrical components such as circuit breakers and load centers.
“The world needs to be prepared for some chaos as a result of what’s happening, tariff-induced,” Marshall added.
