"For much of the past three years, Lennar, America's second-largest homebuilder, has pursued an aggressive strategy: prioritize sales pace and market share, even if it meant slicing deeper into margins through price cuts and heavy incentives in the currently housing affordability strained market. That approach helped the company keep homes moving in softer Sun Belt markets like Florida, Texas, and Arizona. But now, after reporting its weakest gross margin since 2009, Lennar is signaling it's ready to shift gears."
"The numbers show why. Lennar's average selling price, net of incentives, fell to $383,000 in Q3 2025-down 9.2% from the same quarter last year, and 22% below the 2022 peak of $491,000. Some of that 22% decline reflects outright price cuts or the construction of smaller homes, but much of it stems from a surge in incentive spending, particularly mortgage rate buydowns. In fact, Lennar's incentives averaged 14.3% of the final sales price last quarter, the highest level since 2009, according to John Burns Research & Consulting. On a $450,000 home, that works out to more than $64,000 in concessions."
Lennar prioritized sales pace and market share for much of the past three years, using price cuts and heavy incentives to keep homes moving in softer Sun Belt markets such as Florida, Texas, and Arizona. That strategy produced the company's weakest gross margin since 2009 and reduced average selling price, net of incentives, to $383,000 in Q3 2025, down 9.2% year-over-year and 22% below the 2022 peak of $491,000. Incentive spending surged, averaging 14.3% of final sales price last quarter—more than $64,000 in concessions on a $450,000 home. Co-CEO Stuart Miller said Lennar will pull back slightly from the sales-over-margin approach as mortgage-rate declines have not yet translated into stronger sales.
Read at Fast Company
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