Lennar Corp beat Wall Street forecasts second-quarter profit on Monday, helped by strong demand for new homes as the U.S. homebuilder slashed base pricing to attract cautious customers amid high mortgage rates.
The popular 30-year fixed mortgage rate is at a two-decade high of about 7%, and most homeowners are loath to resell their homes because they locked down home loan rates below 5% amid cheap debt.
“Although affordability continued to be tested by interest rate movements and simultaneously challenged consumer sentiment, purchasers remained responsive to increased sales incentives,” stated CEO Stuart Miller.
In the quarter ended May 31, Lennar reported an average home price of $426,000, down from $449,000 a year earlier. The company delivered 19,690 homes vs 17,885 last year.
LSEG data shows quarterly earnings of $3.45 per share, compared to analysts’ average estimate of $3.24.
The company expects third-quarter home deliveries to be between 20,500 and 21,000, slightly below analysts’ expectation of 20,917.
Company shares fell 1.8% after the bell.
