Lennar just posted a 52% decline in net earnings Y/Y. Is it bad when your net earnings get cut in half. In the “strong sales season”?

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Forget the daily market chatter about flashy tech or quick trades. If you want the real pulse of the American economy, look no further than where people actually live: the housing market. Right now, that vital sector, for some of its biggest players, is signaling real trouble, not just a passing chill.



Take Lennar, for instance, one of the nation’s heavyweight homebuilders. The numbers just dropped, and they’re not pretty, especially considering we’re supposedly in the “strong sales season.” Their home sales revenues took a hit, plunging 7% down to $7.8 billion. That wasn’t some fluke; Lennar itself pointed to “continued weak housing market trends” as the primary driver. And what’s really driving that revenue drop? The average sales price of homes delivered got slashed by 9%, now sitting at $389,000. But here’s the real kicker, the one that makes you double take: Lennar just posted a brutal 52% decline in net earnings year over year. A 52% year over year decline in net earnings for a major homebuilder like Lennar, alongside cuts to average sales prices and revenue, represents a material adverse event. This dramatic erosion directly impacts shareholder value and signals a heightened risk profile for investors. It’s a stark indicator of rapid market recalibration, pointing to potential broader economic deceleration that warrants immediate scrutiny.

Now, beyond Lennar’s specific pain, there’s a massive underlying shift no one seems to be screaming about, and it’s got real consequences: U.S. housing inventory is accelerating. And it’s not just some minor blip; this is a significant uptick. You combine that with the latest read on homebuilder sentiment, which is now scraping levels near pandemic lows. That tells you the guys actually building the homes are getting cold feet because economic uncertainty is plaguing consumers, making them hesitant to buy. This all gets wrapped up in what some are calling “The Most Splendid Housing Bubbles in America, May 2025,” detailing price drops and gains across 33 large, expensive metros. Accelerating housing inventory combined with plummeting homebuilder sentiment signals a critical market dislocation with systemic implications. An excess supply meeting consumer uncertainty and falling home prices creates potent downward pressure, risking widespread property value depreciation. This exposes lenders, homeowners, and local economies to significant financial risk, potentially triggering mortgage defaults and broader economic contraction. It’s a revaluation of housing assets that could cascade through the entire financial system, demanding urgent oversight. This isn’t just about a few less homes sold; it’s about the gears of a massive sector grinding down, and when housing hiccups, the whole economy feels the tremor.

Source:

https://www.lennar.com/investors/news-and-events/press-releases
https://www.nahb.org/news-and-economics/housing-data/builder-sentiment
https://www.cnbc.com/2025/06/17/homebuilder-sentiment-june-2025.html
https://www.realtor.com/research/data/housing-market-stats/
https://wolfstreet.com/2025/06/16/the-most-splendid-housing-bubbles-in-america-may-2025-the-price-drops-gains-in-33-large-expensive-metros/