Executive Vice President & Chief Financial Officer at PulteGroup
Thanks, Ryan, and good morning. As Ryan highlighted, the year has gotten off to an excellent start as home sale revenues in the first quarter were up 18% over last year to $3.1 billion. Higher revenues for the quarter were driven by an 18% increase in average sales price to $508,000, while closings of 6,039 homes were consistent with last year. The higher ASP for the period was driven by double-digit gains in pricing within our first-time move-up and active adult fire groups.
By buyer group, our mix of closings for the first quarter was also consistent with last year, as we made -- we remain well balanced across the primary buyer groups. In the quarter, 35% of buyers were first time, 40% were move-up and 25% were active adult. In the comparable prior year period, the breakdown was 33% first-time, 44%, move-up and 23%, active adult.
In the first quarter, we recorded net new orders of 7,971 homes, which is down 19% from last year. Lower orders for the quarter were primarily the 7% decrease in community count, combined with the impact of aggressively controlling sales paces, given ongoing disruptions in the supply chain. As has been the case for the past several quarters, we continue to restrict sales in many communities in order to align sales with current production pace.
Looking more closely at our order activity, orders to first-time buyers decreased 13% to 2,710 homes, while orders to move up buyers were lower by 22% to 3,341 homes and active adult orders declined 23% to 1,920 homes. The relative outperformance among first-time buyers is due to the availability of the spec production we started in the back half of 2021 that supported some incremental orders. Between delays in municipal approvals and extended land development time lines, it is taking longer for some communities to open for sale. As a result, in addition to being down from the prior year, our first quarter average community count of 777 was slightly below our previous guidance.
We expect the modest drag in the community openings that we experienced in the first quarter to continue for the remainder of the year. As such, we now expect that our average community count in the second quarter will be 780, with growth to 800 in the third quarter and 830 in the fourth quarter. Reflective of the strength -- strong demand conditions we experienced in the quarter, our cancellation rate remained exceptionally low at 9%.
In total, we ended the first quarter with a unit backlog of 19,935 homes, which is an increase of 5% over last year. The dollar value of our backlog increased 31% to $11.5 billion, which reflects the 5% unit growth combined with a significant year-over-year increase in our ASP and backlog.
As Ryan noted, our teams are doing a great job moving homes through the production cycle in light of the challenges the industry is facing and the availability of labor and materials. As a result, we ended the first quarter with 21,269 homes under construction, which is an increase of 44% over last year. This production number includes 5,181 spec homes that are currently in the pipeline, which is almost triple our spec units at this time last year. At quarter end, specs were 24% of units under production as we continue to make steady progress toward our goal of 25% to 30%.
Our overall production pipeline is still early in the construction process as 28% of these homes are at the initial start stage with 43% of the homes at the framing stage. We ended the quarter with only 64 finished specs, which is consistent with our comments that homes made available for sale sell quickly. Based on the universe of homes in production, as well as their stage of construction, we currently expect to deliver between 7,200 and 7,600 homes in the second quarter. Again, assuming no significant improvement or erosion in the availability of labor and/or materials, we still expect to deliver 31,000 homes for the year, which would be an increase of 7% over last year.
On our prior earnings call, we noted that, given supply constraints and limited opportunity to meaningfully increase construction pace, we would rely on price as the bigger lever to maximize return. Looking at the dollar value of our backlog and new orders, you can see that this is what has occurred. Based on the average price in backlog and the mix of homes we expect to deliver, we expect our second quarter closings to have an ASP in the range of $525,000 to $535,000. Inclusive of the $508,000 average sales price realized in Q1 and the first-time spec homes we expect to deliver in the back half of the year, we now expect our average sales price for the full year to also be in the range of $525,000 to $535,000. As we always highlight, the final mix of deliveries can influence the average sales price we realized in any given quarter.
Given the ongoing strong demand conditions, we have been able to increase sales prices sufficiently to offset rising costs and to further expand our gross margin. In the first quarter, homebuilding gross margin was 29%, which is an increase of 350 basis points over the first quarter of last year and is up 220 basis points sequentially. In addition to the strong demand and pricing environment, our Q1 deliveries also benefited from the flow-through of lower cost lumber, as prices for wood products rolled over in the back half of last year.
Until a recent pullback, lumber prices had moved significantly higher since the beginning of the year, which will impact our closings in the back half of this year. Beyond lumber, we are continuing to see meaningful inflation in most materials and labor costs. As such, even with the recent pullback in lumber, we expect house cost inflation exclusive of land cost to be in the range of 10% to 12% for the full year. Based on the strength of recent selling conditions and despite the volatility in the materials and labor market, we now expect our gross margin to be in the range of 29.5% to 30% for each of the remaining three quarters of the year.
Given the timing and impact of lumber and other input costs, we expect to be towards the higher end of this range in Q2, but likely toward the end -- lower end of the range in the third and fourth quarters. As always, there are a lot of moving pieces, so we will update you on our gross margin guidance if needed as we move through the year.
Our SG&A expense in the first quarter was $329 million or 10.7% of home sale revenues, which is in line with our earlier guidance. In the comparable prior year period, our reported SG&A expense of $272 million or 10.5% of home sale revenues included a pretax insurance benefit of $10 million. Exclusive of that benefit, our adjusted SG&A expense was $282 million or 10.9% of home sale revenues.
Given expected homebuilding revenues for the coming quarters, we currently expect SG&A expense in the second quarter to be in the range of 9.4% to 9.6%, which would be a 30-basis-point improvement over the prior year at the midpoint. For the full year, we now expect SG&A expense to be in the range of 9.2% to 9.5% of home sale revenues.
First quarter pretax income for our financial services operations was $41 million, compared with prior year pretax income of $66 million. Lower pretax income for the current period is reflective of a much more competitive market conditions which negatively impacted our capture rate and overall profitability per loan. Mortgage capture rate for the quarter was 81%, down from 88% last year.
Our reported tax expense for the first quarter was $145 million for an effective tax rate of 24.2%. Our effective tax rate in the period was lower than our recent guidance. We recorded benefits related to equity compensation in the quarter. Looking ahead, we estimate our tax rate to be approximately 25% in each quarter over the balance of the year. Our reported net income for the first quarter was $454 million or $1.83 per share. In the comparable prior year period, our reported net income was $304 million or $1.13 per share, while adjusted net income was $343 million or $1.28 per share.
In the first quarter, the company repurchased 10.3 million common shares or approximately 4% of the shares outstanding at the end of 2021 at an average price of $48.59. Relative to the first quarter of last year, our share count is down by almost 10%. In addition to allocating $500 million to share repurchases in the first quarter, we invested $1.1 billion of land acquisition and development. This keeps us on track to achieve our prior guidance of $4.5 billion to $5 billion of land spend for the full year, with more than 50% of that spend being for development of existing land assets.
Inclusive of our first quarter spend, we ended the quarter with approximately 235,000 lots under control, of which 52% were held under option. Our strong land pipeline provides us with the lot need to grow our business, while allowing us to focus future investment on projects that meet our underwriting standards. Even after allocating approximately $1.6 billion to investment in the business and share repurchases, we ended the quarter with $1.2 billion of cash and a gross debt-to-capital ratio of 21.5%.
It's worth mentioning here that as highlighted in this morning's earnings release, Moody's Investors Service recently noted the strength of our operations and overall financial position when they upgraded PulteGroup's senior unsecured ratings from Baa2 -- to Baa2 from Baa3.
As Ryan discussed, given the Federal Reserve comments that we were in for a period of rising rates, we are acutely focused on ways to mitigate land related risk. In recent years, we have established a land pipeline that can support the ongoing growth of our operations, but provides optionality should demand conditions change in the future. Going forward, we will continue to emphasize the use of lot options or comparable structures to control rather than own positions and we are actively working to increase our percentage of option lots within our land portfolio.
Now, let me turn the call back to Ryan.