PulteGroup heads into the final stretch of May with its stock down 12% over the past month, the borrow cost rising sharply, and options traders running more defensive than usual — yet none of these signals is extreme enough on its own to dominate the narrative. What makes the week interesting is the quiet, steady accumulation of bearish positioning against a backdrop where the Street remains broadly constructive.
The most notable shift this week is in the cost to borrow, which has climbed more than 50% in seven days to 0.56% APR — its highest level in the past six weeks. That still qualifies as cheap borrow in absolute terms, but the direction of travel is telling. Short interest has nudged up to 3.96% of the free float, rising about 2% on the day and nearly 2% across the week. From the lows in early May near 3.6%, shorts have been edging back in steadily. The lending market itself remains wide open — availability is enormous at over 5,500% of short interest, meaning there is no squeeze pressure whatsoever in the borrow pool. New shorts have ample room to enter, and there is no mechanical impediment to the position building continuing.
Options positioning adds a layer of caution to the picture. The put/call ratio has eased somewhat to 1.22 after hitting the 52-week high of 1.50 just days ago on May 15. At 1.22, it remains well above the 20-day average of 1.10. The shift toward puts accelerated sharply around May 8, coinciding with the stock breaking below its prior trading range. Even as the ratio has pulled back slightly from its peak, it still points to more hedging activity than has been typical, rather than outright capitulation or a clean bullish reset.
The Street's stance is genuinely mixed, though tilting cautiously positive. Analysts raised targets after the Q1 print in late April — UBS moved to $162, Evercore ISI to $151, Wells Fargo to $140 — keeping the consensus at buy with an implied return of roughly 24% from current levels. Yet the same late-April cluster of upgrades and raises followed a series of cuts in early April, when Seaport Global made a dramatic move from Buy to Sell with a target of $100, and Wells Fargo slashed from $150 to $132. That downgrade-then-upgrade sequence reflects exactly the uncertainty the bears have been pricing in. The stock's P/E has compressed nearly 1.75 turns over the past month to just 10.6x, while the price-to-book has shed 0.22 to 1.49x — a re-rating driven entirely by price weakness rather than any fundamental deterioration. The RSI at 37 is approaching oversold territory without yet reaching it.
The bull and bear cases are clearly drawn. Bulls point to the active adult segment returning toward its target 24-25% share of revenues, which historically supports better margins. Bears focus on order trends: forecasted year-over-year declines of around 9% through the second half of the year represent a meaningful step down from earlier, more optimistic projections. The COO sold roughly $767,000 worth of stock on May 18 at $111.77 — a modest sale, and not unusual for routine planning purposes, but it comes as the stock has already shed more than $23 from February's $135+ transaction prices, when the CEO sold over $21 million in a cluster of transactions. Insiders have been consistent sellers into strength; none have stepped in as buyers during this month-long slide.
Among closely correlated peers, DHI fell 6% on the week and TOL dropped nearly 8%, suggesting sector-wide pressure rather than company-specific problems for PHM. MTH fared better, off just 2.6%, and GRBK held nearly flat. That relative resilience from the smaller builders hints at a rotation dynamic within homebuilders rather than uniform selling. PHM's 3% weekly decline places it toward the middle of the pack — neither the most punished nor the most protected.
The next read on whether the order-decline narrative has any traction will come from housing starts and permit data, as well as any macro signals on mortgage rates, which remain the single biggest swing factor for affordability and demand. Until then, positioning reflects a market that has grown more cautious without yet turning outright negative.
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