Lennar reports lower quarterly profit as affordability pressures weigh on home buyers

Core Viewpoint - Lennar reported a significant decline in third-quarter profit and forecasted lower home deliveries for the fourth quarter, indicating ongoing challenges in the housing market due to inflation and elevated interest rates [1][3]. Financial Performance - Lennar's third-quarter earnings were $2.29 per share, down from $4.26 per share a year earlier [4]. - Revenue for the quarter ended August 31 fell by 8.7% to $8.25 billion, which was below analysts' estimates of $9 billion [4]. Market Outlook - The company expects fourth-quarter home deliveries to be between 22,000 and 23,000 units, which is below analysts' expectations of over 25,000 units [3]. - Analysts at BofA Securities noted that the recent Fed rate cut is unlikely to have a significant short-term impact on the housing market, as the market had already priced in the rate changes [2]. Operational Challenges - Lennar's profit margins are under pressure due to sales incentives like mortgage rate buydowns and cost adjustments amid weakening home demand [3]. - The company does not anticipate being affected by tariffs and aims to focus on improving margins [3].