Home Builder Lennar Stock Falls as High Mortgage Rates Hurt Results | Global News Avenue

Lennar’s stock (London) fell on Thursday, a day after the homebuilder reported lower-than-expected results and guidance as high mortgage rates constrained sales.

The company reports fourth-quarter earnings Earnings per share (EPS) 4.06 US dollars, revenue fell 9% year-on-year to 9.95 billion US dollars. Both were well below Visible Alpha’s estimates.

Lennar said the revenue decline was primarily due to a 7% drop in the number of homes delivered to 22,206 units and a 2.5% decrease in the average selling price of homes delivered to $430,000. In addition, new orders fell 3% to 16,895 units, and the value of new orders fell 1% to $7.18 billion.

‘Affordability constraints’ negatively impact performance

Co-CEO Stuart Miller explained that although Fed Lower short-term rates, housing market ‘proving more challenging’ as mortgage rates rise nearly 100% base point Miller added that while demand remained strong and the housing shortage continued to drive the market, “affordability constraints” from rising borrowing costs had negatively impacted its performance.

The company expects new orders for the quarter to be between 17,500 and 18,000, while analysts polled by Visible Alpha expected closer to 20,000. Deliveries are expected to be 17,000 to 17,500 units.

Lennar shares fell 4.5% to $139.37, their lowest level in a year.