A major U.S. homebuilder that designs and builds houses nationwide, also running mortgage, title, and multifamily businesses. Founded in 1954 in Miami as F&R Builders, it took its name in 1971 when founders Leonard Miller and Arnold Rosen spliced "Len" plus "nar" to make "Lennar." Its Next Gen designs feature a private multi-generational suite with its own entrance, and its Everything's Included program bundles popular upgrades as standard.
Q2 FY2026 homebuilding gross margin fell to 15.6% from 17.8% as revenue declined 5.2% year over year
Homebuilding compressed again, to 15.6% from 17.8% a year ago. fell 5.2% to $7.9B and dropped 31.5% to $1.24 as lower revenue per square foot and higher land costs weighed on results, with the margin decline the sixth straight drop. The is now fully in place, but profitability has not stabilized.
Key takeaways
Homebuilding declined to 15.6% from 17.8%, driven by lower per square foot and higher land costs, partially offset by reduced construction costs.
Home sales fell 2% to $7.6B as average sales price dropped 5% to $371,000 on market weakness and increased incentives, while deliveries rose 2% to 20,519 homes.
fell 31.5% to $1.24 and fell 36.2% to $304.8M versus Q2 2025; was 5.2%, down 2.5 points .
Section summaries
Management's Discussion and Analysis
Q2 FY2026 home sales revenue fell 2% to $7.6B on 5% lower ASP, while gross margin contracted to 15.6% from 17.8%.
⌄
Home deliveries rose 2% to 20,519, but average sales price dropped 5% to $371,000 due to market weakness and increased incentives.
Financial Services operating earnings fell to $100.2M from $156.6M, primarily due to lower profit per locked loan in the mortgage business.
loss narrowed to $38.9M from $52.9M, driven by smaller on technology investments, a non-cash item.
Multifamily swung to an $18.3M from a $14.8M loss in the prior-year quarter.
What changed
Q2 2026 homebuilding came in at 15.6%, below the 15.5%-16.0% guide flagged for the quarter in Q1 2026 and down from 17.8% a year earlier — the margin has now fallen six straight quarters .
remained negative at -$284.4M for the quarter and -$718M for the six months, extending the streak of negative outflows that began Q1 FY2025 and totaled roughly $2.4B through Q1 2026 plus the first half of 2026.
showed on technology investments this quarter after the item was absent in Q3 FY2025 and Q1 FY2026, narrowing the loss to $38.9M.
The spin-off completed in FY2025 deconsolidated $5.6B in land assets; this quarter the company had no borrowings on its and $2.2B in cash, with land-light homesites at 98% per the prior annual report.
Full-year 2026 deliveries remain near the ~85,000 guide as the Rausch Coleman markets ramp, though Q2 deliveries of 20,519 were within the 20,000-21,000 guided range.
What to watch
Q3 FY2026 homebuilding and whether it stabilizes after six straight declines, against the trend of ~15-16% guided earlier in the year.
Whether turns positive in Q3 after five consecutive quarters of negative outflow through Q2 2026.
Next mark-to-market movement in technology investments after this quarter's smaller losses resumed the item.
' performance as the land bank counterparty and any VIE primary beneficiary developments flagged as a critical audit matter.
Homebuilding declined to 15.6% from 17.8%, driven by lower per square foot and higher land costs, partially offset by reduced construction costs.
as a percentage of home sales increased to 9.2% from 8.8%, reflecting lower and higher marketing and selling expenses.
Financial Services operating earnings fell to $100.2M from $156.6M, primarily due to lower profit per locked loan in the mortgage business.
Multifamily swung to an $18.3M from a $14.8M loss, while Lennar Other loss narrowed to $38.9M from $52.9M, driven by smaller on technology investments.
Cash used in operations was $718M for the six months, with $1.1B increase in inventories and $555M in deposits/pre-acquisition costs, partially offset by and a $247M decrease in loans held-for-sale.
Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks related to fluctuations in interest rates on our investments, debt obligations and loans held-for-sale. We utilize forward commitments, option contracts and interest rate swaps to mitigate the risks associated with our mortgage loan portfolio. Sinc…
⌄
We are exposed to market risks related to fluctuations in interest rates on our investments, debt obligations and loans held-for-sale. We utilize forward commitments, option contracts and interest rate swaps to mitigate the risks associated with our mortgage loan portfolio. Since November 30, 2025, there have been no material changes in market risk exposures associated with interest rate risk.
As of May 31, 2026, we had no outstanding borrowings under our Credit Facility.
As of May 31, 2026, our borrowings under Financial Services' warehouse repurchase facilities totaled $1.8 billion under residential facilities and $52.2 million under LMF Commercial facilities.
Information Regarding Interest Rate Sensitivity
Principal (Notional) Amount by
Expected Maturity and Average Interest Rate
May 31, 2026
Six Months Ending November 30, Years Ending November 30, Fair Value at May 31,
(Dollars in millions) 2026 2027 2028 2029 2030 2031 Thereafter Total 2026
LIABILITIES:
Homebuilding:
Senior Notes andother debts payable:
Fixed rate $ 454.6 1,158.5 12.8 11.5 701.7 9.6 — 2,348.7 2,362.2
Average interest rate 5.2 % 4.8 % 3.9 % 7.5 % 5.2 % 6.6 % — 5.0 % —
Variable rate $ — — 1,710.0 — — — — 1,710.0 1,710.0
Average interest rate — — 4.7 % — — — — 4.7 % —
Financial Services:
Notes and other debts payable:
Fixed rate $ — — — — — — 119.7 119.7 120.2
Average interest rate — — — — — — 3.4 % 3.4 % —
Variable rate $ 1,844.0 — — — — — — 1,844.0 1,844.0
Average interest rate 5.0 % — — — — — — 5.0 % —
For additional information regarding our market risk refer to Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our 2025 Form 10-K.
We are the subject of various claims, legal proceedings, and regulatory matters in the ordinary course of business. We do not believe that the ultimate resolution of these claims or lawsuits will have a material adverse effect on our business or financial position.
⌄
We are the subject of various claims, legal proceedings, and regulatory matters in the ordinary course of business. We do not believe that the ultimate resolution of these claims or lawsuits will have a material adverse effect on our business or financial position.
Our business is subject to a variety of risks and uncertainties. These risks are described elsewhere in this Quarterly Report on Form 10-Q, including in Management’s Discussion and Analysis of Financial Condition and Results of Operations above, or in our other filings with the…
⌄
Our business is subject to a variety of risks and uncertainties. These risks are described elsewhere in this Quarterly Report on Form 10-Q, including in Management’s Discussion and Analysis of Financial Condition and Results of Operations above, or in our other filings with the SEC, including Part I, Item 1A of our 2025 Form 10-K. There have been no material changes in our risk factors from those disclosed in those reports.