Lennar Corporation reported third-quarter 2026 revenue of $8.0 billion and delivered 20,840 homes as the homebuilder maintained production volume despite higher mortgage rates and worsening affordability conditions. Net earnings attributable to Lennar were $284 million, or $1.19 per diluted share, compared with $591 million, or $2.29 per share, a year earlier.
Excluding $53 million of mark-to-market losses on technology investments and $39 million of net one-time items in Financial Services, adjusted earnings were $294 million, or $1.23 per diluted share.
New orders declined 9% year over year to 20,879 homes, while deliveries decreased 3% to 20,840. Lennar ended the quarter with a backlog of 16,857 homes valued at approximately $6.3 billion.
Homebuilding revenue totaled approximately $7.76 billion, down from $8.25 billion in the year-ago period, primarily because of a 3% decline in both deliveries and average selling prices. The average sales price of homes delivered fell to $372,000 from $383,000.
Lennar said affordability remained the defining constraint on demand. Its average selling price reflected approximately 12% in incentives along with base-price adjustments intended to support sales volume.
Gross margin on home sales was 15.8%, compared with 17.5% a year earlier, as lower revenue per square foot and higher land costs outweighed savings in construction expenses. Selling, general and administrative expenses represented 9.2% of home sales revenue, resulting in a 6.6% net margin on home sales.
Despite pressure on margins, Lennar continued to reduce construction costs and cycle times.
Construction cost per square foot improved another 1% sequentially, 6% year over year and 14% compared with the company’s fourth-quarter 2023 baseline. Cycle time fell to a record 116 days, compared with 121 days in the previous quarter and 126 days a year earlier.
Completed unsold inventory decreased to 1.8 homes per community from 2.1 in the prior quarter, while inventory turnover reached 2.4 times. Lennar also said it owns fewer than 2.5% of the approximately 488,000 homesites it owns or controls, reflecting its continued land-light strategy.
The company’s Financial Services business generated approximately $129 million of operating earnings, compared with $177 million in the prior-year quarter. Excluding one-time items, results were affected by lower profit per locked mortgage loan and lower lock volume.
Multifamily recorded a $3 million operating loss, improving from a $16 million loss a year earlier. Lennar Other reported an $84 million operating loss, primarily due to $53 million of mark-to-market losses on technology investments.
Lennar also continued returning capital to shareholders and managing its balance sheet. The company repurchased 3 million shares for $256 million at an average price of $85.49 and repaid $400 million of senior notes during the quarter. Homebuilding cash and cash equivalents finished the period at approximately $1.2 billion.
Homebuilding debt totaled approximately $4.3 billion at August 31, producing a debt-to-total-capital ratio of 16.6%. Net homebuilding debt was approximately $3.15 billion, resulting in a 12.7% net debt-to-total-capital ratio.
Looking ahead, Lennar expects fourth-quarter new orders of approximately 19,500 to 20,500 homes and deliveries of 22,000 to 23,000 homes.
The company expects an average selling price between $370,000 and $380,000, gross margin on home sales of 15.5% to 16.0%, SG&A of 8.7% to 9.0% of home sales and Financial Services operating earnings of $90 million to $95 million.
Lennar reduced its full-year 2026 delivery target to approximately 80,000 to 81,000 homes from its previous expectation of 82,000 to 83,000, citing continued pressure from interest rates and deteriorating market conditions.
Management nevertheless continues to view the longer-term housing environment as constructive because of the structural shortage of homes in the U.S. and demand from traditional buyers as well as single-family rental and build-to-rent operators.
KEY QUOTES:
“Our third quarter 2026 results reflect consistent focus on our operating strategy of maintaining volume and production while navigating a challenging economic environment. While our earnings of $1.19 per share were below expectations, they reflect the nature of the environment in which we are operating, which has deteriorated since our last earnings call.”
“Mortgage rates increased through the quarter, with the 30-year rate at approximately 6.8% at quarter end and even higher since. Rates are responding as inflation remains above the Fed’s target, driven by geopolitical tension and higher oil prices. Additionally, consumer confidence has declined as rates and affordability have driven more consumers to slow their purchase decision.”
“Our consistent strategy has been to meet demand at affordability and build supply rather than wait the market out. We have prioritized volume to create needed supply for the market, which we deliver at affordable prices, while we leverage scale advantages and ultimately improve margins. The fundamental shortage of housing in America has not been solved.”
Stuart Miller, Executive Chairman, Chief Executive Officer and President of Lennar
