(Reuters) -Homebuilder Pultegroup on Tuesday posted second-quarter revenue above Wall Street estimates, helped by steady home sales resulting from buyer incentives, sending the company's shares up 1.7% before the bell.

The sector is grappling with a weakening consumer sentiment, prompting builders to offer incentives like mortgage rate buydowns and smaller, more affordable homes to stimulate demand - which in turn hurt their margins.

Home sale gross margin in the second quarter decreased to 27% from 29.9% last year.

"Over the course of the 2025 spring selling season, we saw consumers dealing with a range of issues from high interest rates and challenged affordability to macro concerns about the strength of the economy," said CEO Ryan Marshall.

Marshall, however, noted positive consumer response to the pullbacks in interest rates in late June.

The Atlanta-based company's second-quarter revenue fell 4.3% from a year ago to $4.40 billion, but was still ahead of analysts' estimate of $4.39 billion, according to data compiled by LSEG.

Pultegroup earned $608.5 million, or $3.03 per share, in the quarter ended June 30, compared with year ago net income of $809.1 million, or $3.83 per share.

(Reporting by Aatreyee Dasgupta in Bengaluru; Editing by Shailesh Kuber)

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