Lennar delivered more homes than expected in the first quarter, but incentives drove down its average sales price, which was 1% lower than the same quarter last year at $408,000.
Why it matters: As America’s second-largest builder, the company’s results are seen as a bellwether for the industry. Its use of incentives suggests that consumers remain skittish about prices and are looking for breaks where they can get them.
“We continued to use incentives, including interest rate buydowns, to reconcile home prices to market conditions,” executive chairman and co-CEO Stuart Miller said. “These incentives bridged affordability to activate sales and manage inventory, while continuing to provide supply to the market. Generally speaking, net prices for homes, together with rents in overbuilt apartment markets, have started to decline, as demand remains constrained by affordability.”
Key Numbers
- $520 million profit. That’s $1.96 a share, which beat analysts’ expectations.
- New orders increased 1% to 18,355 homes; new orders dollar value decreased 4% to $7.4 billion.
- Backlog of 13,145 homes with a dollar value of $5.8 billion.
- Deliveries increased 6% to 17,834 homes.
- Revenue of $7.6 billion.
What He Said
“Our first quarter was marked by a challenging macroeconomic environment for home building. While demand remains strong, persistently higher interest rates and inflation, combined with a downturn in consumer confidence and a limited supply of affordable homes, made it increasingly difficult for consumers to access homeownership,” Miller said.
“Despite an uncertain macro environment, we are optimistic about our business and remain focused on our mission of building a healthier housing market and bringing attainable homes to more people. As we look ahead, we expect to deliver between 19,500 to 20,500 homes for the second quarter and expect our gross margin to be approximately 18%, depending on market conditions. We remain steadfast in our goals to match our production with sales pace, drive strong current cash flow, and maintain carefully managed inventory levels so that, as market conditions stabilize and ultimately improve, we will benefit from normalized margins across our growing volume.”
Go deeper: Lennar Reports First Quarter 2025 Results
