PulteGroup, Inc. (PHM) and KB Home (KBH) are two prominent homebuilders in the United States. PHM acquires and develops land primarily for residential purposes and constructs home designs, including single-family detached, townhomes, condominiums, and duplexes under various brand names. It also provides mortgage financing, title insurance, and other services to home buyers. In comparison, KBH builds and sells various homes, including attached and detached single-family residential homes, townhomes, and condominiums, primarily for first-time, first move-up, second move-up, and active adult homebuyers. It also offers insurance products and title services.
Low mortgage rates coupled with depressed inventory levels amid rising demand in the remote working era led to soaring home prices over the past one and a half years. These, along with rising input prices, led to home prices increasing by 18.8% in 2021. While rising mortgage rates have become a limiting factor this year, rising demand from entry-level homebuyers amid an improving job market and fast declining inventory should keep the housing market red-hot this year as well.
