"In remarks to The Wall Street Journal, Federal Housing Finance Agency Director Bill Pulte questioned why large homebuilders continue to repurchase shares while millions of Americans struggle to afford a home. He suggests that buybacks may run counter to national affordability goals and hinted explicitly that access to government-backed mortgage liquidity could be used as leverage to influence corporate behavior. Read between the lines, Pulte said. Sticks are on the table."
"Set aside the politics for a moment. Public homebuilders are not operating in a profit windfall. They are navigating one of the most constrained margin environments of the past decade. Prices are down meaningfully from their 2022 peaks. Incentives especially mortgage rate buydowns have risen steadily. Product mixes have shifted toward lower-priced homes. Inventory risk has increased. Many operators, particularly at the community level, are selling homes at or near break-even after accounting for incentives, commissions, and carrying costs."
Federal Housing Finance Agency Director Bill Pulte criticized large public homebuilders for repurchasing shares while many Americans struggle to afford homes and suggested that access to government-backed mortgage liquidity could be used to influence corporate behavior. The criticism frames share repurchases as prioritizing shareholders over prospective homebuyers. Public homebuilders are navigating one of the most constrained margin environments of the past decade, with prices down from 2022 peaks and incentives, especially mortgage-rate buydowns, rising. Product mixes have shifted toward lower-priced homes, inventory risk has increased, and many community-level operators are selling at or near break-even after accounting for incentives, commissions, and carrying costs.
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