Lennar profit halves as higher mortgage rates pressure homebuyers
LEN•Third-quarter profit and revenue fall
Lennar on Wednesday reported third-quarter profit that more than halved as persistently high mortgage rates weighed on demand for new homes.
The Miami, Florida-based homebuilder said third-quarter profit came in at $283.9 million, or $1.19 per share, compared with last year's nearly $591 million, or $2.29 a share.
For the quarter ended August 31, total revenue fell over 8% from a year ago to $8.05 billion.
Lennar shares fell 3% after the bell.
Outlook reflects affordability pressure
CEO Stuart Miller said the quarterly profits that came "below expectations" reflected the challenging economic environment, "which has deteriorated" since last quarter.
Like its peers, Lennar continues to grapple with a prolonged affordability crunch as mortgage rates neared 7% during the quarter and weakening consumer confidence prompted buyers to postpone home purchases, slowing demand across the new-home market.
Lennar expects the average sales price in the next quarter to range between $370,000 and $380,000 per unit, compared with analysts' estimate of $383,610, according to data compiled by LSEG.
