Strong fiscal first quarter results put Lennar on pace to achieve its goal of 10% growth for 2024. A continued alignment of production pace to sales pace and the utilization of pricing and incentives to navigate the demand environment were the foundation to first quarter results, according to the builder.

“Although affordability continued to be tested by interest rate movements, purchasers remained responsive to increased sales incentives, resulting in a 28% increase in our new orders and a 23% increase in our deliveries year over year,” executive chairman and co-CEO Stuart Miller said.

Miller said in the fiscal first quarter, ended Feb. 29, Lennar started 18,338 homes, sold 18,176 homes, and delivered 16,798 homes. For the second quarter, the builder forecasts starting and selling 21,000 homes and delivering between 19,000 and 19,500 homes, which would move Lennar closer to its goal of an even-flow manufacturing model. During the Lennar earnings call, Miller said an even-flow model would enhance cash flow, bottom line, and predictability for the home builder.

“Operationally, both our starts pace and sales pace were 4.9 homes per community in the first quarter, as we continue to move closer to an even-flow operating model,” Jon Jaffe, co-CEO and president of Lennar, said. “Our cycle time was down to 154 days, or 30% year over year, as our production-first focus has positively impacted our production times, while our inventory turn improved to 1.5 times, reflecting broader efficiencies.”

Lennar reported revenues from home sales increased 13% in the first quarter to $6.9 billion, driven by the 23% increase in home deliveries to 16,798 and partially offset by an 8% decrease in the average sales price of deliveries to $413,000. Lennar said the decrease in price was primarily due to pricing to market through an increased use of incentives and product mix.

“The macroeconomic environment remained relatively consistent throughout our first quarter, with interest rates fluctuating within a manageable range, employment remaining strong, housing supply remaining chronically short due to production deficits over a decade, and demand strength driven by strong household formation,” Miller said.

New orders in the quarter increased 28% to 18,176 homes, and new orders dollar value increased 21% to $7.7 billion. Lennar ended the quarter with 16,270 homes in backlog, valued at $7.4 billion. Lennar’s multifamily segment reported an operating loss of $16 million in the first quarter compared with a loss of $22 million in the first quarter of 2023.

The builder reported profits increased 21% to $719 million in the quarter, while profits per share increased 25% to $2.57. Profits per share in the quarter beat analyst projections of $2.21.

Jaffe said Lennar improved its years’ supply of owned homesites to 1.3 years from 1.9 years last year and improved its controlled homesite percentage to 77% from 68% in the first quarter of 2023.

“With cash on hand exceeding our debt, and with overall liquidity of $7.6 billion, our balance sheet remains extremely strong,” Miller said. “Against that backdrop, we remain focused on our land strategies initiative in order to intensify our land-light focus and assure consistency of execution now and in the future as we embrace an ever-more focused manufacturing model for Lennar.”