Lennar Announces Q3 2025 Financial Results
Lennar Corporation , one of the United States’ largest homebuilders and a recognized leader in residential construction, today announced its financial results for the third quarter ended August 31, 2025. The report highlights a period marked by persistent challenges in the housing sector, including high interest rates, affordability constraints, and margin pressures, while also underscoring the company’s disciplined execution, operational efficiencies, and long-term growth strategy.
Financial Highlights
For the third quarter of 2025, Lennar reported net earnings attributable to the company of $591 million, or $2.29 per diluted share. This compares with net earnings of $1.2 billion, or $4.26 per diluted share, for the third quarter of 2024.
When adjusting for non-core items, the picture shifts slightly. Excluding mark-to-market gains of $99 million on technology investments, Lennar’s net earnings for Q3 2025 came to $516 million, or $2.00 per diluted share. In the prior-year period, when excluding mark-to-market gains of $39 million on technology investments and one-time charges of $89 million related to the company’s Multifamily segment, net earnings were $1.1 billion, or $3.90 per diluted share.
The year-over-year decline reflects a more difficult housing environment compared with 2024, as affordability constraints, market-driven price adjustments, and the cost of incentives weighed on margins.
Deliveries and Orders
Despite these headwinds, Lennar maintained strong production and sales momentum:
- Home Deliveries: 21,584 homes were delivered in Q3 2025.
- New Orders: 23,004 homes were ordered during the quarter.
These figures underscore Lennar’s ability to sustain volume in a soft housing market, even as the company employed targeted incentives to support buyer demand.
The average sales price for homes delivered fell to $383,000, a reduction driven largely by higher use of mortgage rate buydowns and price adjustments to address affordability. Gross margin slipped to 17.5%, while selling, general and administrative expenses (SG&A) were recorded at 8.2% of revenues. Both figures reflect the pressures of the current environment.
Executive Commentary
Stuart Miller, Executive Chairman and Co-CEO
Stuart Miller addressed the results, saying:
“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.”
Miller emphasized that while short-term adjustments were necessary, Lennar remains focused on long-term structural efficiency:
“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.”
Jon Jaffe, Co-CEO and President
Jon Jaffe highlighted operational improvements and cycle-time achievements:
“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.”
He also noted the role of digital transformation in supporting sales and efficiency:
“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.”
Market Conditions and Outlook
The broader housing market in 2025 has been shaped by persistent affordability challenges. Elevated mortgage interest rates through much of the year discouraged some potential buyers, leading builders to employ greater use of incentives. Toward the end of the third quarter, however, rates began to decline, aided by the Federal Reserve’s recent rate cut.
Miller commented on this shift:
“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.”
Given this backdrop, Lennar is taking a measured approach to volume. The company expects that moderating its delivery pace will allow demand to catch up as affordability improves.
For the fourth quarter of 2025, Lennar provided the following guidance:
- New Orders: 20,000 – 21,000 homes
- Deliveries: 22,000 – 23,000 homes
- Gross Margin: Approximately 17.5%, consistent with Q3, depending on market conditions
Operational Focus
Lennar’s results underscore the effectiveness of its “production-first” model, which emphasizes cycle-time reduction, tighter inventory control, and cost management. Key operational highlights include:
- Cycle Time: Improved to 126 days, marking the fastest in company history.
- Inventory Control: Less than two unsold, completed homes per active community, keeping risk levels manageable.
- Inventory Turns: Improved to 1.9 times, reflecting faster movement of homes through the system.
The company attributes these improvements to strong partnerships with trade contractors, disciplined land acquisition and development strategies, and the use of digital tools to streamline processes and engage homebuyers more effectively.
Strategic Positioning
Even amid market challenges, Lennar continues to emphasize its strategic priorities:
- Affordability: Adjusting pricing and using targeted incentives such as mortgage rate buydowns to maintain sales momentum.
- Technology and Scale: Leveraging data-driven platforms, digital marketing, and centralized systems to reduce costs and improve efficiency.
- Strong Balance Sheet: Preserving financial strength to remain resilient through cycles and capitalize on future opportunities.
- Long-Term Value Creation: Maintaining discipline in land acquisition and operations to protect margins and sustain growth.
Industry Context
Lennar’s results highlight broader dynamics in the U.S. housing market:
- High Mortgage Rates: Elevated rates throughout most of 2025 suppressed affordability but began easing in late summer.
- Supply Constraints: Limited housing inventory in many regions continued to support underlying demand despite affordability pressures.
- Shift in Buyer Preferences: Incentives such as rate buydowns became essential to attract buyers in a competitive environment.
- Operational Agility: Builders who can reduce cycle time, manage costs, and maintain inventory discipline are best positioned to weather near-term challenges.
