Lennar Corp Reports Q4 Earnings Miss

(Reuters) – Lennar Corp (NYSE:LEN) missed Wall Street estimates for fourth-quarter profit and revenue on Wednesday, as potential buyers remained reluctant to buy homes due to volatile mortgage rates, sending its shares down 7.5% in aftermarket trade.

The second-largest U.S. homebuilder by sales posted adjusted earnings of $4.06 per share for the quarter, below analysts' estimates of $4.16 per share, according to data compiled by LSEG.

The U.S. housing market has struggled to rebound after being knocked down by a resurgence in mortgage rates in the spring.

The 30-year fixed mortgage rate tracks the benchmark 10-year Treasury note, whose yield jumped to a four-month high in the aftermath of Republican Trump's victory in the U.S. presidential race.

As per a Reuters poll of property experts, purchasing affordability for first-time U.S. homebuyers is expected to worsen over the coming year due to tight supply and fewer-than-expected Federal Reserve interest rate cuts, even as the increase in average home prices is slowing down.

> "Even while demand remained strong and the chronic supply shortage continued to drive the market, our results were driven by affordability limitations from higher interest rates," Lennar's co-CEO Stuart Miller said.

Lennar's average sales price of $430,000 for the quarter fell from $441,000 a year earlier, owing to adjustments in prices caused by an increased use of incentives and a changing product mix.

The company expects to deliver 17,000 to 17,500 homes in the first quarter of 2025. Its deliveries fell 7% to 22,206 homes in the fourth quarter ended November 30.

Lennar reported home sales gross margins of 22.1% in the quarter compared with 24.2% in the previous year.

Its fourth-quarter revenue fell to $9.95 billion, below analysts' estimate of $10.08 billion.