Bloomberg Intelligence Lennar Forecast Disappoints in Challenging Market for Builders
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Sep 19, 2025 Drew Redding, a U.S. Homebuilding Analyst at Bloomberg Intelligence, shares insights on Lennar's disappointing forecast, highlighting concerns about housing affordability and job market fluctuations. He explains the stagnation in existing-home sales as more households opt for renting. Meanwhile, James Walker, CEO of Nano Nuclear Energy, discusses the innovative microreactor technology, outlining plans for the Kronos project and strategies for commercialization, positioning nuclear energy as a solution for the future.
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Lennar's Volume-For-Margin Tradeoff
- Lennar reported solid orders but is using large incentives to drive traffic, squeezing average selling prices and margins.
- Management expects pressure to continue despite hope for rate cuts to revive demand.
Builders Trade On Volume And Rate Expectations
- Lennar prioritizes driving higher sales volumes and will sacrifice gross margin to achieve that objective.
- Builder stocks often move ahead of rate expectations and face valuation resistance around 2–2.25x book.
Existing Market Stays Frozen
- Existing-home turnover remains depressed because many current mortgages are locked at very low rates and prices are much higher than 2019.
- That dynamic freezes the market and propels renters and household growth into rental units.