LENNAR CORP /NEW/ Q3 FY25 Results

Our third quarter results reflect both the continued pressures of today’s housing market and the consistency of Lennar’s operating strategy. This quarter, we delivered 21,584 homes and recorded 23,004 new orders. Achieving these results required additional incentives, resulting in a reduced average sales price of $383,000, and our gross margin drifted down to 17.5%, while our SG&A expenses came in at 8.2%, reflecting the soft market conditions. While our current results reflect incentives and price adjustments to match market conditions, our scale and technology investments are building the foundation for structural cost efficiencies. Backed by a strong balance sheet and disciplined execution, we remain confident in our ability to build margin as conditions stabilize and to create sustained value. Interest rates remained elevated throughout the third quarter, but then declined towards the quarter’s end. This downward trend, paired with the Fed’s recent rate cut, gives us optimism as we head into the fourth quarter. Therefore, we believe that now is a good time to moderate our volume and allow the market to catch up. Accordingly, for the fourth quarter of 2025, we expect new orders of 20,000 - 21,000 homes, deliveries of 22,000 - 23,000 homes, and gross margin of approximately 17.5%, consistent with the third quarter, depending on market conditions. Looking ahead, the long-term need for housing remains, and we are committed to meeting affordability, sustaining even-flow production, and lowering costs through efficiency and scale.

During the quarter, we achieved a starts pace and sales pace of 4.4 homes and 4.7 homes per community per month, respectively, as we used targeted incentives, including mortgage rate buydowns, to sustain momentum. Additionally, we carefully managed our inventory levels, ending the quarter with fewer than two completed, unsold homes per active community, which is within our historical range. Inventory turns improved to 1.9 times, and cycle time improved to 126 days, the shortest cycle time we’ve ever experienced. This reflects the impact of our production-first approach and continued successful negotiations with our trade partners. These efficiency gains, together with our digital marketing and land-management initiatives, position us to deliver consistent volume, support affordability, and drive further improvements in our cost structure.