Lennar’s Price Concessions Have Bolstered Demand and Protected Its Backlog; FVE Raised to $120

As the U.S. housing market softens, Lennar has proactively offered a combination of base price reductions and sale incentives (for example, mortgage rate buydowns) to persuade more-skittish consumers to purchase its homes and prevent order cancellations. This strategy appears to be working as intended as fiscal first-quarter orders declined 10% year over year, outperforming management’s guidance for a 14%-24% decline. The average selling price of new orders declined 9% to $452,000.