By Shaina Mishkin

The most powerful phrase for investors in home builders right now is "normal." Investors will be watching for signs of it during PulteGroup's first-quarter earnings on Thursday morning.

A multiyear slowdown has been playing out in the housing market. Headwinds such as rising mortgage rates and macroeconomic and geopolitical uncertainty have dulled home sales since rates began rising off their historic lows in 2022. The iShares U.S. Home Construction exchange-traded fund, which tracks the industry, is up about 4% this year.

To keep homes selling, many builders have offered buyer incentives, such as free upgrades or temporarily or permanently buying down a borrower's mortgage rate, at the expense of their margins. Investors have been waiting for signs that margins would stop compressing as the housing market improved.

Good omens for investors have been few and far between in housing market economics. Existing-home sales have continued their slow crawl this year. The latest kick to housing sentiment was a sharp rise in mortgage rates in March as the war in Iran caused bond investors to reconsider inflation expectations. Mortgage rates rose as high as 6.6% before mellowing in recent weeks to around 6.3%.

The gain in mortgage rates might not have dented buyer traffic as much as feared, if an earnings report from the nation's largest home builder has broader applicability. D.R. Horton earlier this week beat earnings per share and margin expectations, sending the stock to its highest close since late February, according to FactSet data.

Normal news was good news for investors expecting the worst. "I would say the demand was good," D.R. Horton chief operating officer Michael Murray said on a call with analysts when asked how buyer demand in March compared with typical levels. "We saw sales in-line with normal seasonality, kind of as we expected and hoped throughout the month, and we're pleased with our sales results through mid-April at this point."

Investors will hope for a similar theme from PulteGroup, which reports earnings before the market opens on Thursday. Analysts are looking for earnings of $1.81 a share on $3.4 billion in revenue. That's down from one year prior, when the builder reported earnings of $2.57 a share on $3.9 billion in revenue.

In particular focus will be the builder's margins, which have been among the strongest in the industry. The builder's gross margin on home sales in its fourth quarter was 24.7%, and it guided to gross margins in a range from 24.5% to 25% during its fourth-quarter earnings call. Investors expect a 24.7% margin in its first quarter, according to FactSet.

Write to Shaina Mishkin at shaina.mishkin@dowjones.com

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April 22, 2026 16:30 ET (20:30 GMT)

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