Key financial results
- Lennar delivered 20,840 homes in the third quarter of 2026.
As noted in the release, we delivered 20,840 homes within our guidance range of 20,500 to 21.500 million.
- New orders for the quarter were 20,879 homes.
We generated 20,879 new orders, just below our range of 21,000 to 22,000.
- Gross margin improved sequentially to 15.8% as sales incentives on deliveries decreased to 12%.
- Net margin was 6.6%, resulting in GAAP earnings per share of $1.19 and $1.23 excluding onetime items.
- SG&A expense was 9.2% of revenue.
SG&A was 9.2%, above our expected range of 8.8% to 9%.
- The company ended the quarter with $1.2 billion of cash and a homebuilding debt to total capital ratio of 16.6%.
- Financial Services generated $129 million, aided by a onetime net gain in the title business.
Financial Services produced $129 million above our guidance, but helped by a onetime net gain in our title business.
Business segment results
- Homebuilding: Homebuilding operations delivered 20,840 homes and generated 20,879 new orders across 1,713 active communities.
- Financial Services: Financial Services produced $129 million, exceeding guidance due to a onetime title business gain.
Financial Services produced $129 million above our guidance, but helped by a onetime net gain in our title business.
- Multifamily and Other: Management did not give detailed profit figures for the multifamily segment or Lennar Other segment on the call.
Capital allocation
- During the quarter, Lennar paid down $400 million of senior debt.
We paid down $400 million of senior debt, repurchased 3 million shares of stock for $256 million and paid $119 million in dividends for the quarter.
- The company repurchased 3 million shares of stock for $256 million.
We paid down $400 million of senior debt, repurchased 3 million shares of stock for $256 million and paid $119 million in dividends for the quarter.
- Dividend payments totaled $119 million for the quarter.
We paid down $400 million of senior debt, repurchased 3 million shares of stock for $256 million and paid $119 million in dividends for the quarter.
- Deposits and pre-acquisition costs ended the quarter at $7.3 billion, increasing by $265 million sequentially.
Industry trends and dynamics
- Higher interest rates and inflation constrained consumer confidence and affordability during the quarter.
- Resale inventory has increased nationally and acts as a more aggressive competitor, particularly in Texas and Florida.
Resale supply has continued to rebuild and is now very competitive in price. Active listings nationally are back above historic levels. In Texas, and in Florida, they are particularly high.
- Labor availability is tightening in certain geographies due to immigration enforcement and data center construction.
Competitive landscape
- Resale sellers are cutting prices and competing directly for customers, impacting pricing dynamics in South Central and Southeast markets.
- Lennar maintains strong partnerships with trades, which helps manage cost pressures and labor allocation despite market tightness.
I think our purchasing team, they've done a great job working with our trade partners, and this is when that partnership really pays off.
Macroeconomic environment
- Inflation driven by energy and oil supply disruptions from the conflict in Iran continues to push up the cost of living and interest rates.
- The Federal Reserve raised rates, signaling a data-driven approach with near-term rate cuts off the table.
While this was clearly the hope of some, yesterday's rate hike clearly demonstrates that the Fed will continue to be data-driven.
- Housing affordability has become a critical political focus at federal and state levels.
Growth opportunities and strategies
- Lennar prioritizes consistent even flow production and volume to manage costs and monetize underwritten land.
- The company continues to refine its asset-light land-light balance sheet model to generate strong cash flows and returns.
And second, continuously refining our asset-light land light balance sheet model, to ultimately generate strong and growing cash flows and returns.
- Construction cost per square foot improved to approximately $80, down 6% year-over-year and down 14% from the fourth quarter of 2023.
Construction cost per foot have continued to improve and improved again this quarter to approximately $80 per square foot.
- Cycle times reached a record low of 116 days.
Financial guidance and outlook
- Fourth quarter new orders are expected to be between 19,500 and 20,500 homes.
- Fourth quarter deliveries are anticipated to range from 22,000 to 23,000 homes.
- Average sales price for fourth quarter deliveries is projected between $370,000 and $380,000.
Our Q4 average sales price on those deliveries should be between $370,000 and $380,000.
- Fourth quarter gross margin is expected to be between 15.5% and 16%.
- SG&A percentage for the fourth quarter is guided between 8.7% and 9%.
- Financial Services earnings for the fourth quarter are expected to be between $90 million and $95 million.
- Fourth quarter earnings per share are projected to be approximately $1.30 to $1.65.
Q3 FY2026 results
| Metric | Result | Change |
|---|---|---|
| Deliveries | 20,840 homes | Not stated |
| New orders | 20,879 homes | Not stated |
| Gross margin | 15.8% | improved sequentially |
| GAAP earnings per share | $1.19 | Not stated |
| EPS excluding onetime items | $1.23 | Not stated |
| Average sales price | $372,000 | Not stated |
How management sounded
Cautious (-5 on our -100 to +100 scale). Management emphasized a difficult macroeconomic backdrop with rising interest rates, inflation, and increased resale competition dampening consumer confidence. Management sounded more upbeat than on 0% of the 302 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Read the analyst Q&A summary and guidance and outlook for this call.
What to watch before the next call
- Trajectory of mortgage rates and the 10-year Treasury yield affecting affordability and the cost of buydowns.
- Labor availability and regional cost pressures stemming from immigration enforcement and competing commercial construction.
- Resale supply levels and pricing aggression in key markets like Texas and Florida.
Earlier calls
- Q2 2026 (Jun 12, 2026), tone Balanced: Lennar reported second quarter 2026 earnings per share of $1.31, excluding mark-to-market items, alongside declining sales incentives and strong cost execution.
