Dallas, Texas 10/16/2013 (Financialstrend) – Average American citizen who is actively looking to purchase a house via mortgage financing would find that the lending interest rates he or she would have to pay now is probably higher compared to last year. As an end payer he will pay more monthly mortgage payment even though the price of the property has been the lowest since the sub-prime crisis hit the U.S financial markets.
This is probably the reason why the stock of home builder PulteGroup, Inc. (NYSE:PHM) has been struggling to post gain in value over the past few months. The prevalent macro economic situation is also of not much help to the house building sector. As per “Credit Suisse’s homebuyer traffic index” the home buying trend has dropped to a 2 year low. The reason for home buyers to stay away from the buying scene is due to the increase in interest rates leading to inflated pricing of the houses. Builders are fretting that the recently announced dip in interest rates has still not attracted buyers to explore the market.
When trading commenced on October 15, the stock of PHM was trading at $15.99 per share. Mid way through the day’s trading the stock had shed close to 2% of its market value. This weakness of the stock has been on for a few quarters now. During trading the previous week, the stock was down 0.19% and has depreciated by close to 13.5% over the past 60 days.
The residential construction company has a market cap of $6.16 billion. It is one of the biggest market cap residential building companies and is tracked by S&P 500 index. Even in the depressed market conditions for housing the company has managed to post sales of $5.31 per share over a trailing 12 month period with income of $293 million in the same time period.