Lennar, one of the nation’s top homebuilders, warned in its latest earnings call that high mortgage rates, a housing shortage, and economic uncertainty are creating challenges that are starting to squeeze its profits.
In a quarterly call with investors on Friday, Lennar executives said that orders rose 1%, to 18,355, for the three months that ended in February, compared with a year earlier. Deliveries rose 6% annually, to 17,834.
Those figures beat Wall Street expectations, as did Lennar’s quarterly profits of $520 million on revenue of $7.6 billion.
Still, shares of the homebuilder slumped more than 4% on Friday, closing at their lowest price since November 2023, after Lennar warned that weakness in the housing market is beginning to affect its profit margins.
“While demand remains strong, persistently higher interest rates and inflation, combined with a downturn in consumer confidence and a limited supply of affordable homes, made it increasingly difficult for consumers to access homeownership,” said Stuart Miller, Lennar’s chairman and co-CEO.