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Affordability Woes Sink Lennar Shares

Lennar (LEN) - ★★★★ – Ranked 27th in Q2 2024 Large Cap Rankings.

It was a brutal Thursday for homebuilder Lennar Corporation (LEN) as its shares plummeted over 7% on concerns about eroding housing affordability. The sell-off was triggered by frank comments from CEO Stuart Miller about the challenges potential homebuyers are facing.

In Lennar's earnings call, Miller bluntly stated that affordability remains "stretched" for many prospective buyers. He pointed to worrying signs like increased credit card and personal debt levels showing up in mortgage applications. "We have seen some delinquencies in some of that debt," Miller warned investors.

His candid assessment came just a day after Lennar reported disappointing fiscal Q1 revenue that missed Wall Street's targets. Lennar's troubles reverberated across the homebuilding sector, with rivals D.R. Horton and Toll Brothers both suffering over 3% share price declines on the session.

As the housing market continues to grapple with elevated mortgage rates and buyer trepidation, Lennar's share price implosion serves as a sobering reminder of the affordability hurdles facing the industry. With the SPDR Homebuilders ETF also down nearly 2%, it was a dismal day for residential construction stocks.


Lennar has a ★★★★ ranking in our Q2 2024 Large Cap Rankings. Subscribe for price targets, metrics, and other analysis.

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