Lennar Cuts 2026 Delivery Target After Orders Slow
The homebuilder now expects 80,000 to 81,000 deliveries in 2026 after third-quarter orders fell 9% to 20,879 homes.
Lennar Corporation (LEN) cut its full-year 2026 delivery target to approximately 80,000 to 81,000 homes from the 82,000 to 83,000 it discussed in the prior quarter, citing continued pressure on interest rates and deteriorating market conditions.
The Miami-based homebuilder generated 20,879 new orders in the third quarter ended August 31, 2026, a 9% year-over-year decline that followed a 4% year-over-year drop to 21,749 homes in the second quarter. Deliveries reversed a year-over-year gain, falling 3% to 20,840 homes after a 2% increase to 20,519 homes in the prior quarter.
Net earnings attributable to Lennar were $284 million, or $1.19 a share, compared with $591 million, or $2.29 a share, a year earlier. Excluding $53 million of mark-to-market losses on technology investments and $39 million of one-time items, net, in Financial Services, earnings were $294 million, or $1.23 a share.
Executive Chairman, Chief Executive Officer and President Stuart Miller said the $1.19-a-share result was below expectations and reflected an environment that had deteriorated since the last earnings call. He said the 30-year mortgage rate was approximately 6.8% at quarter-end and higher since, that inflation remained above the Federal Reserve’s target amid geopolitical tensions and higher oil prices, and that consumer confidence had declined as rates and affordability slowed purchase decisions.
Total revenues were $8.0 billion. Homebuilding revenues from home sales decreased 6% year over year to $7.7 billion, driven by a 3% decrease in average sales price and a 3% decrease in deliveries. The average sales price of homes delivered was $372,000, versus $383,000 a year earlier.
Gross margin on home sales improved sequentially to 15.8% from 15.6%. The year-over-year decline in gross margins was primarily due to lower revenue per square foot and higher land costs, partially offset by lower construction costs. Selling, general and administrative expenses were 9.2% of home-sales revenues, producing a net margin of 6.6%.
Miller said the company delivered 20,840 homes, within guidance of 20,500 to 21,500, with a starts and sales pace of 4.1 homes per community per month across 1,713 active communities. Construction cost per square foot improved another 1% sequentially. Cycle time reached a record low of 116 days. Completed, unsold inventory fell to 1.8 homes per community. Average sales price included approximately 12.0% in incentives.
Homebuilding operating earnings were $502 million. Financial Services operating earnings were $129 million, including $39 million of one-time items, primarily a litigation accrual reversal; excluding those items, the decline versus a year earlier was due to lower profit per locked loan and lower lock volume. Multifamily posted an operating loss of $3 million. Lennar Other recorded an operating loss of $84 million, driven by $53 million of mark-to-market losses on technology investments.
Backlog was 16,857 homes with a dollar value of $6.3 billion. Homebuilding cash and cash equivalents were $1.2 billion. The company redeemed $400 million of 5.25% senior notes due June 2026, had $650 million outstanding under its $3.1 billion revolving credit facility, and repurchased 3 million shares for $256 million. Homebuilding debt to total capital was 16.6%.
For the fourth quarter of 2026, Lennar expects new orders of approximately 19,500 to 20,500 homes and deliveries of approximately 22,000 to 23,000 homes, with gross margin of approximately 15.5% to 16.0%, average sales price of approximately $370,000 to $380,000, SG&A toward 8.7% to 9.0%, and Financial Services operating earnings of $90 million to $95 million.