Lennar Misses Q2 Earnings Estimates as Profit Drops, Home Prices Slide

Revenue for the Miami-based homebuilder came in at $8.38 billion, topping analyst expectations of $8.16 billion, according to LSEG data. However, Lennar’s average sales price declined to $389,000 from $408,000 in the first quarter and $426,000 a year earlier, reflecting affordability concerns among buyers.

Second-quarter profit per share fell sharply from $3.45 in the same quarter last year, amid tightening margins and softer market conditions. Gross margins on home sales were $1.4 billion, or 17.8% (18.0% excluding purchase accounting), compared to $1.9 billion, or 22.6%, in Q2 2024.

"We continue to focus on consistent volume and pace as we drive efficiencies through every part of our platform in order to realize improved margin even as market conditions soften," said Executive Chairman and co-CEO Stuart Miller.

To sustain sales momentum amid higher mortgage rates and weakening consumer confidence, Lennar used rate buydowns, pricing adjustments, and cost reductions. “As mortgage interest rates remained higher and consumer confidence continued to weaken, we drove volume with starts while incentivizing sales to enable affordability and help consumers to purchase homes,” Miller added.

Lennar delivered 20,131 homes in the quarter ended May 31, up from 19,690 a year earlier, aligning with its own forecast range of 19,500 to 20,500 homes. New orders rose 6% to 22,601 homes.

For the third quarter of fiscal 2025, Lennar expects:

• New orders between 22,000 and 23,000

• Deliveries between 22,000 and 23,000

• Average sales price of $380,000 to $385,000

• Gross margin on home sales of approximately 18%