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Sat September 3, 2011
President Obama's economic plans could affect Michigan home builder
The nation’s home builders are one group expected to closely watch President Obama’s economic address to Congress this week. Pulte Homes of Bloomfield Hills is the nation’s largest home builder.
Pulte, like its competitors, has seen its sales plummet as the housing market crashed in recent years. And past government efforts to prop up the housing market with tax breaks have failed to spur new home construction.
Vicki Bryan is a senior high yield analyst with Gimme Credit. She says the government has tried to help home builders with tax breaks. But those tax breaks are expiring, and the housing industry might still be a decade away from a rebound.
“We had not only too many homes, but too many home builders. And the market will have to shake out. That helps the position of the remaining builders…I think one of those will be Pulte. But Pulte could suffer and be less profitable than stronger peers until then.”
Pulte remains upbeat. A Pulte spokeswoman says the company continues to focus on improving its business fundamentals.
A recent Wall Street Journal article talked about several national home building companies being in trouble. Pulte was not mentioned in the article.