PulteGroup Inc. (PHM) stock surged 5.08% in pre-market trading on Thursday after the homebuilder reported strong fourth-quarter results, driven by higher home sales and prices. The company's earnings of $4.43 per share and revenue of $4.92 billion surpassed Wall Street estimates, bolstered by a 6% increase in home closings to 8,103 units and an average selling price of $581,000.

The company's strong performance can be attributed to several factors. Firstly, PulteGroup utilized strategic sales incentives to boost home sales despite elevated mortgage rates, which impacted buyer demand as homebuyers continued to face affordability challenges. Additionally, the company announced a $1.5 billion increase to its share repurchase authorization, bringing the remaining buyback capacity to $2.1 billion, reflecting its commitment to returning excess funds to shareholders.

Furthermore, PulteGroup expressed confidence in the long-term outlook for the housing market. CEO Ryan Marshall stated that the company expects new home supply to continue to be absorbed without a significant increase in standing inventory, citing factors such as a longstanding housing shortage, labor availability challenges, and the expectation of lower activity in the resale market due to higher mortgage rates.