The shortfall in margin [in Q4] resulted from increased incentives on homes sold and delivered within the quarter," Lennar co-CEO Stuart Miller said. "Consequently, we are moderating our expectations for margins and sales in the first quarter of 2025. Overall, the economic environment, which we believed last quarter was constructive for the homebuilding industry, has certainly turned more challenging as longer-term interest rates along with mortgage rates have climbed steadily since our last earnings call.
If Lennar's outlook is correct, Q1 2025 will not only see margins below pre-pandemic Q1 2019 levels but also the company's lowest Q1 gross margin of the past decade.
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