Lennar reported on Thursday that home deliveries in its fiscal first quarter came in below analyst forecasts, reflecting continued strain in the U.S. housing market driven by high borrowing costs and elevated prices. The Miami-based builder said it delivered 16,863 homes in the quarter, short of the 17,677 units that LSEG data showed analysts had expected. Shares slipped 1.2% in after-hours trading.
Company leadership pointed to the same set of persistent headwinds that have weighed on the sector for more than three years. "Our first quarter of fiscal year 2026 was defined by the same persistent headwinds that have challenged the housing market for over three years - high mortgage rates, constrained affordability, cautious consumer sentiment, and geopolitical uncertainty, especially now including the recent conflict in Iran," Lennar Co-CEO Stuart Miller said.
The shortfall in deliveries is part of a broader slowdown among single-family homebuilders. Years of underproduction have left a relative supply deficit, but sustained inflation has pushed up prices, which in turn has damped sales. To protect margins and try to stimulate demand, Lennar has been implementing cost reductions and selective incentives, including mortgage rate buydowns aimed at lowering the effective cost of financing for buyers.
Market sentiment for the sector has been soft. A survey released for February showed U.S. homebuilder sentiment fell for a second consecutive month, with the National Association of Home Builders/Wells Fargo Housing Market Index slipping one point to 36. That measure has remained below the 50 break-even threshold for 22 straight months, underscoring persistent weakness. The survey attributed the decline to elevated land and construction costs and house prices that remain high relative to incomes.
Looking ahead, Lennar provided a second-quarter deliveries range of 20,000 to 21,000 homes, compared with analysts' consensus expectation of 20,232 units. For context, the company delivered 20,131 homes in its second quarter of 2025. In its guidance, Lennar also lowered its forecast for second-quarter gross margin on home sales to a range of 15.5% to 16.0%, down from a prior estimate of 17.8%.
Financial results for the period ended February 28, 2026, also missed estimates. On an adjusted basis, first-quarter earnings were 88 cents per share, below the Street consensus of 96 cents. Revenue for the quarter totaled $6.62 billion, versus estimates of $6.88 billion.
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