Lennar, a leading homebuilder, reported a modest rise in orders and quarterly profits but warned of pressures from high mortgage rates, limited affordable housing supply, and economic uncertainty affecting profit margins. Despite a 6% increase in home deliveries and profits of $520 million, the company's shares fell 4% following the earnings announcement. Chairman Stuart Miller highlighted efforts to attract buyers through incentives like mortgage rate buydowns, noting a decrease in net home sales prices as affordability issues persist, with projected gross margins declining further in the upcoming quarter.
"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."
"Generally speaking, net prices for homes, together with rents in overbuilt apartment markets, have started to decline, as demand remains constrained by affordability."
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