Major Charlotte homebuilder says national slowdown is coming

CHARLOTTE — Lennar Corp. Executive Chairman Stuart Miller expects a national slowdown in both single-family and multifamily construction in 2023, but his company will reduce prices and offer incentives as it keeps building.

Miller also told shareholders during an earnings conference call on Dec. 15 that Lennar’s plans to spin off its non-homebuilding operations into a company called Quarterra have been put on hold. He previously planned to launch the spinoff by the end of 2022.

The Miami-based homebuilder turned in a record year for revenue and profits. However, the rapid rise in interest rates has reduced demand for homes nationwide. While many national homebuilders have halted or significantly slowed building, Lennar intends to maintain its volume by adjusting prices to market conditions, offering incentives and buying down interest rates for purchasers.

That means Lennar was willing to profit less on each home sale. Its profit margin per home sale fell 270 basis points in the fiscal fourth quarter ended Nov. 30. Miller said its home profit margin would fall further in the first quarter, but he expects it to improve from there because construction and land costs should come down.

“Throughout the year we adjust prices and affordability for our customers to maintain (sales) volume,” Miller said. “We will be adaptable to the interest rate as it evolves throughout the year.”

Miller stressed Lennar has not done a bulk sale at reduced prices to clear inventory.

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