Lennar Corporation Reports Decline in Revenue and Profitability for Q2 2025

Lennar Corporation reported its financial results for the second quarter of 2025, revealing a decline in both revenue and profitability compared to the same period last year. The company generated total revenues of $8.38 billion, down from $8.77 billion in the second quarter of 2024. Net earnings attributable to Lennar were $477.4 million, or $1.81 per diluted share, a significant decrease from $954.3 million, or $3.45 per diluted share, in the prior year. The decline in earnings was attributed to a decrease in the average sales price of homes delivered, which fell by 9% to $389,000, despite a 2% increase in the number of homes delivered.

In the first half of 2025, Lennar's revenues remained relatively flat at $16.01 billion compared to $16.08 billion in the same period of 2024. The company delivered 37,965 homes, a 4% increase from 36,488 homes in the previous year, but the average sales price decreased by 5% to $398,000. Gross margins on home sales also contracted, with margins at 18.2% for the first half of 2025, down from 22.2% in the prior year, primarily due to rising land costs and a decrease in revenue per square foot.

Strategically, Lennar completed the spin-off of Millrose Properties, Inc. on February 7, 2025, distributing approximately 80% of Millrose's stock to its shareholders. This move is part of Lennar's strategy to become a more asset-light, pure-play home manufacturing company. Additionally, the company acquired Rausch Coleman Homes on February 10, 2025, expanding its market presence into new regions including Arkansas, Oklahoma, Alabama, and Kansas/Missouri, while enhancing its existing footprint in Texas and Florida.

Operationally, Lennar reported a total of 20,131 homes sold in the second quarter of 2025, with a backlog of 15,538 homes valued at $6.48 billion as of May 31, 2025. The company experienced a cancellation rate of 14% across its homebuilding segments. The financial services segment reported operating earnings of $156.6 million, an increase from $146.3 million in the previous year, driven by higher profit margins per locked loan. However, the multifamily segment continued to face challenges, reporting an operating loss of $14.8 million, although this was an improvement from a loss of $20.4 million in the prior year.

Looking ahead, Lennar anticipates selling and delivering between 22,000 and 23,000 homes in the third quarter of 2025, with an expected average sales price between $380,000 and $385,000. The company aims to maintain strong cash flow while navigating a challenging economic environment characterized by high mortgage rates and fluctuating consumer confidence. Lennar's management remains focused on driving volume and efficiency, with a goal of stabilizing margins as the housing market continues to evolve.