Lennar co-CEO on Q3 earnings miss: This has been a difficult housing cycle

Financial Performance - Lennar's Q3 experienced a downturn, with revenue falling short of expectations and deliveries being lower than anticipated [1] - Lennar's home building gross margins decreased to 175%, a significant drop compared to 29% in 2022 [1] Market Conditions and Affordability - The housing cycle has been difficult, with softening market conditions and affordability issues impacting sales volume [1] - Maintaining sales volume required additional incentives to avoid building excess inventory [1] - Lower interest rates this month were encouraging, but production is slowing and delivery guidance is being lowered [2] - Average selling prices declined by 9% [3] - Affordability was stretched, leading to incentives such as buying down mortgage rates and lowering prices [4] Cost Management - Trade partners have been reducing costs to maintain volume, recognizing the impact of reduced home building [2] Industry Outlook - Most big builders are offering incentives due to stretched affordability [4] - Only Toll Brothers, a luxury home builder, expressed optimism about the months ahead at a housing conference [4] - The market is being recalibrated to avoid pushing too hard on a market that doesn't want to be pushed [3]