Miami – September 19, 2026 -- Lennar Corporation posted third-quarter net earnings of $284 million, or $1.19 per diluted share, down from $591 million, or $2.29 per share, a year earlier, as rising mortgage rates and weakening affordability cut into homebuilder margins.
New orders drop 9% as buyers retreat from higher rates
New orders fell 9% to 20,879 homes in the quarter ended August 31, 2026, while deliveries declined 3% to 20,840 homes, within the company's guided range of 20,500 to 21,500. Total revenues reached $8.0 billion, with revenues from home sales down 6% to $7.7 billion on a 3% drop in average sales price to $372,000 from $383,000 a year ago.
Gross margin compresses to 15.8% on higher land costs
Gross margin on home sales fell to 15.8% from 17.5% a year earlier, driven by lower revenue per square foot and higher land costs, partially offset by construction cost savings. SG&A expenses rose to 9.2% of home sale revenues from 8.2%, reflecting reduced operating leverage and higher marketing spend. Net margin on home sales came in at 6.6%.
Mortgage rates near 6.8% weigh on consumer confidence
Executive Chairman and CEO Stuart Miller said the 30-year mortgage rate stood at approximately 6.8% at quarter end and has risen further since, as inflation stays above the Federal Reserve's target amid geopolitical tension and higher oil prices. He said market conditions "deteriorated" since the last earnings call, though he maintained that housing shortages continue to drive demand from primary buyers as well as single-family-for-rent and build-to-rent buyers.
Company trims full-year delivery target to 80,000-81,000 homes
Lennar lowered its full-year 2026 delivery guidance to approximately 80,000 to 81,000 homes, down from the 82,000 to 83,000 range discussed last quarter. For the fourth quarter, the company expects new orders of 19,500 to 20,500 homes, deliveries of 22,000 to 23,000 homes, gross margin of 15.5% to 16.0%, average sales price of $370,000 to $380,000, and SG&A improving to 8.7% to 9.0%.
Financial Services earnings decline despite litigation reversal
Financial Services operating earnings fell to $129 million from $177 million a year earlier, even after including a $39 million one-time gain, net, tied to a litigation accrual reversal from a court judgment. Excluding that item, the decline stemmed from lower profit per locked loan and reduced mortgage lock volume. Lennar Other posted an $84 million operating loss, driven by $53 million in mark-to-market losses on technology investments, compared with $62 million in operating earnings a year earlier that included $99 million in mark-to-market gains.
Construction cycle time hits record low of 116 days
Construction cost per square foot improved 1% sequentially and 6% year over year, down 14% since the fourth-quarter 2023 baseline. Cycle time fell to a record 116 days from 121 days last quarter and 126 days a year ago. Completed, unsold inventory dropped to 1.8 homes per community from 2.1 last quarter, with inventory turn at 2.4 times. Lennar owns fewer than 2.5% of the approximately 488,000 homesites it owns and controls on its balance sheet.
Balance sheet actions include $400 million note redemption
The company ended the quarter with $1.2 billion in homebuilding cash, after redeeming $400 million of 5.25% senior notes due June 2026 and repurchasing 3 million shares for $256 million at an average price of $85.49. Homebuilding debt to total capital stood at 16.6%, with $650 million drawn on the company's $3.1 billion revolving credit facility. The effective tax rate rose to 26.4% from 24.4%, partly due to the company's spin-off of Millrose Properties, Inc.