During a challenging fiscal fourth quarter, Lennar reported year-over-year declines in new orders and deliveries, but noted demand remained strong in the housing market. For the full fiscal year, the home builder delivered double-digit year-over-year improvements in both orders and deliveries.

“In the course of our fourth quarter, the housing market that appeared to be improving as the Fed cut short-term interest rates, proved to be far more challenging as mortgage rates rose almost 100 basis points through the quarter,” said executive chairman and co-CEO Stuart Miller. “Even while demand remained strong, and the chronic supply shortage continued to drive the market, our results were driven by affordability limitations from higher interest rates.”

In the fiscal fourth quarter, ended Nov. 30, new orders decreased 3% to 16,895 homes while the dollar value of new orders declined 1% to $7.2 billion. Deliveries in the period declined 7% compared to the fourth quarter of 2023 to 22,206 homes. The home builder’s average sales price in the period for deliveries, net of incentives, was $430,000. Fourth quarter earnings were $1.1 billion, or $4.06 per share.

“In our fourth quarter, sales pace lagged expectations as interest rates climbed and our new orders fell short of expectations to 16,895 homes versus the low end of our guidance of 19,000,” Miller said. “Consistent with our strategy of matching sales pace with production, we adjusted sales price, incentives, and margin in order to re-ignite sales and actively manage inventory levels.”

For the full 2024 fiscal year, new orders increased 11% to 76,951 and deliveries increased 10% to 80,210 homes. Earnings for the full year were #3.9 billion, or $14.31 per share.

“We continue to remain focused on our volume-based strategy of driving sales and cash flow while using margin as a shock absorber as we continue to migrate to an asset-light, land-light business model,” Miller said. “This strategy is reflected in both the public filing of a registration statement on Form S-11 for the planned spin-off of Millrose Properties, as well as our previously announced acquisition of Rausch Coleman Homes as we focus on growing to drive affordability and fill the supply gap that is reflected in the marketplace.”

Lennar ended its 2024 fiscal year with 11,633 homes in backlog, representing a value of $5.4 billion. The home builder improved its years supply of owned homesites to 1.1 years from 1.4 years in the same period a year ago. The company also increased its controlled homesite percentage to 82% from 76% in the fourth quarter of 2023.

“Operationally, our starts pace and sales pace were 4.6 homes and 4.2 homes per community in the fourth quarter, respectively, as we continue to move closer to an even flow operating model,” said co-CEO and president Jon Jaffe. “Our cycle time was down to 138 days, or 14% lower year-over-year, as our production first focus has positively impacted our production times, while our inventory turn improved to 1.6 times reflecting broader efficiencies.”

Looking ahead to 2025, Miller said Lennar is targeting between 86,000 and 88,000 homes for the full fiscal year.