Lennar says ‘we continued to see the housing market normalize’ in Q2

Stuart Miller, Executive Chairman of Lennar, said, “During the quarter, we continued to see the housing market normalize and recover from the Fed’s 2022 aggressive interest rate hikes in response to elevated inflation. As consumers have come to accept a “new normal” range for interest rates, demand has accelerated, leaving the market to reconcile the chronic supply shortage derived from over a decade of production deficits. Simply put, America needs more housing, particularly affordable workforce housing, and demand is strong when price and interest rates are affordable.” Miller continued, “Against this backdrop, our second quarter earnings were $872 million, or $3.01 per diluted share, compared to $1.3 billion, or $4.49 per diluted share last year. This quarter’s results reflect the execution of our previously articulated operating strategies of pricing to market and meeting demand with affordable pricing and incentives. Accordingly, while our average sales price per home delivered was $449,000 in the second quarter, compared to almost $500,000 at the peak last year, our home deliveries were 17,074, up 3%, and our new orders were 17,885, up 1%, year over year. Our homebuilding gross margin started to bounce back in the second quarter to 22.5%, reflecting cost reductions, and with carefully managed homebuilding S,G&A expenses of 6.7%, led to a 15.8% net margin. While our operating performance remains strong, we continue to strengthen and fortify our balance sheet and our future. We ended the quarter with homebuilding debt to capital of 13.3%, the lowest in our history, no borrowings on our $2.6 billion revolver and cash of $4.0 billion. With liquidity of $6.6 billion and cash on hand exceeding our debt, our balance sheet has never been in a stronger position.”