Newly built Lennar homes at Tehaleh in Washington state · Chris Light, via Wikimedia Commons · CC BY-SA 4.0

Article · 2026-09-17 · 3 min read · Homebuilding · Stocks

Lennar's profit halves and it trims its 2026 delivery target

Reporting hours after the Fed's rate increase, the homebuilder said the market deteriorated through the quarter: orders down 9 percent, incentives near 12 percent of the price, and 80,000 to 81,000 homes now expected this year instead of 82,000 to 83,000.

By the desk. Researched and written by an AI model from the sources listed at the end; nothing here restates another publication's text.

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What Lennar reported

Lennar, the Miami homebuilder, reported results for its third quarter, the three months to August 31, after the market closed on September 16. Net earnings were 284 million dollars, or 1.19 dollars a share, against 591 million dollars, or 2.29 dollars a share, in the same quarter last year. Leaving out losses on its technology investments and one-time items in its mortgage business, the company put the figure at 1.23 dollars a share. ^{[1, 2]}

The company delivered 20,840 homes, 3 percent fewer than a year earlier, and took 20,879 new orders, 9 percent fewer. Total revenues were 8.0 billion dollars. The average price of a delivered home was 372,000 dollars against 383,000 dollars a year ago, and the gross margin on home sales, the share of the sale price left after the cost of building the home, was 15.8 percent against 17.5 percent. The backlog, homes sold but not yet delivered, stood at 16,857 homes worth 6.3 billion dollars. ^[1]

Reuters reported that the profit more than halved, that revenue fell over 8 percent from a year ago to 8.05 billion dollars, and that the shares fell 3 percent after the bell. ^[4]

Why, in the company's words

Stuart Miller, the executive chairman and chief executive, said earnings of 1.19 dollars a share were below expectations and reflected an environment that has deteriorated since the company's last earnings call. Mortgage rates rose through the quarter, he said, with the 30-year rate at approximately 6.8 percent at the quarter's end and higher since, and rates are responding as inflation remains above the Fed's goal, driven by geopolitical tension and higher oil prices. ^[1]

Consumer confidence has declined as rates and affordability led more buyers to slow their decision, Miller said, while housing shortages continue to bring demand from primary buyers and from investors who buy homes to rent out. The company's answer was to keep building at a steady pace: starts and sales both ran at 4.1 homes a month in each of its 1,713 active communities, construction cost per square foot was 6 percent lower than a year ago, and the time to build a home reached a record low of 116 days. ^[1]

Incentives, the price cuts and closing help a builder offers to get a sale done, ran at approximately 12 percent of the average sales price, along with base price adjustments the company said were needed to sustain volume in a market where affordability remains the defining constraint. ^[1]

The lowered outlook

For the fourth quarter the company expects 19,500 to 20,500 new orders, 22,000 to 23,000 deliveries, a gross margin of 15.5 to 16.0 percent and an average sales price of 370,000 to 380,000 dollars. Citing continued pressure on interest rates and the deterioration in market conditions through the quarter, it moderated its full-year 2026 delivery target to approximately 80,000 to 81,000 homes from the 82,000 to 83,000 it discussed last quarter. These are the company's own expectations, as filed. ^{[1, 2]}

Reuters noted that the average price the company expects, 370,000 to 380,000 dollars a home, is below the 383,610 dollars that analysts compiled by LSEG had estimated. ^[4]

The backdrop: the Fed, the builders' mood and the mortgage rate

Hours before Lennar's release, the Federal Open Market Committee raised its target range for the federal funds rate by a quarter point to 3.75 to 4 percent, by a 12 to 0 vote, and said inflation remains elevated. ^[7]

The same morning, the National Association of Home Builders said its builder confidence index fell three points to 32 in September, the lowest since September 2025. On this index a reading above 50 means most builders feel confident about the outlook, so 32 is well below that line. Thirty-eight percent of builders cut prices in the month, up from 35 percent in August, and 66 percent used sales incentives, the highest share since December. The association named higher mortgage rates, labor shortages and rising material costs. ^{[5, 6]}

Freddie Mac's weekly survey put the average 30-year fixed mortgage rate at 6.76 percent on September 10, up from 6.71 percent the week before and from 6.35 percent a year earlier. ^[8]

Who it reaches, and what comes next

Lennar is the company in the event. The others are adjacent: D.R. Horton, PulteGroup, Toll Brothers and KB Home sell into the same market of buyers facing the same mortgage rates; Builders FirstSource supplies lumber and components to builders, so its volumes follow housing starts; Rocket Companies writes mortgages, and Lennar's own mortgage arm reported lower lock volume in the quarter. KB Home reports its own third quarter on September 22. ^{[1, 9]}

Lennar's earnings call is at 11:00 a.m. Eastern on Thursday, September 17, broadcast at investors.lennar.com and archived there for 90 days. The quarterly report with the full accounts behind the release follows on EDGAR. ^[3]

Sources

Every stock is a company; the desk grades the company behind the stock. This article describes; it does not recommend. Adjacent means the company is not named in the event and the path by which it is reached is stated above.

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