By Shaina Mishkin
Monthly home construction data went dark in October as the U.S. government remained shut down. PulteGroup's third-quarter results, expected Tuesday morning, will turn a light on for investors.
September's housing starts and permits data were expected last Friday, but weren't published as government services remain scaled back during a lapse of funding.
PulteGroup's third quarter financial results will fill in some of the gap. Analysts expect that the builder will earn $2.89 a share on about $4.3 billion in revenue in the quarter ended Sept. 30, according to FactSet. Shares are up about 14% this year, on pace for its best year since 2023, according to Dow Jones Market Data.
Homebuying costs improved in recent months as mortgage rates dropped nearly 0.5 percentage point since the summer to a recent level near 6.3%. Home builders are looking ahead to a busier spring in 2026, the National Association of Home Builders' gauge of industry sentiment showed last week.
Optimism is apparent in builder stocks' valuation metrics, J.P. Morgan analyst Michael Rehaut wrote in an Oct. 17 report. Big builders are trading around 1.8 times book value, he noted.
Investors awaiting PulteGroup's earnings should keep their eyes on both the builder's new orders and its home sale gross margin. The former, which analysts expect will total 6,660, will indicate whether the quarter's largely lower mortgage rates were enough to get buyers back into the market. The latter, which analysts expect will be 26.4%, will allow investors to measure the level of incentives or discounts the builder had to offer to close sales.
The results, combined with commentary around expectations for the fourth quarter and 2026, could boost investor certainty on a coming housing rebound -- or push it further down the road. Builders' valuations "reflect some level of investor optimism regarding a potential turn in fundamentals occurring perhaps sooner than later (which we continue to view as premature)," Rehaut wrote in the note.
Investors will also be listening for managements' read on potential political pressure. President Donald Trump instructed Fannie Mae and Freddie Mac "to get Big Homebuilders going" earlier this month.
"Should the government follow through on its goal to increase production, it could further undermine the home-building stocks and flood the market with additional inventory," Evercore analyst Stephen Kim wrote in an Oct. 17 note.
Write to Shaina Mishkin at shaina.mishkin@dowjones.com
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October 20, 2025 16:00 ET (20:00 GMT)
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