(Reuters) -Lennar Corp beat Wall Street estimates for second-quarter profit on Monday, helped by sustained demand for new houses as the U.S. homebuilder cut base prices to lure in skittish buyers in the face of high mortgage rates.
With the popular 30-year fixed mortgage rate currently at a two-decade high of nearly 7%, existing housing supply also remains tight as a majority of homeowners are unwilling to resell their homes, having locked down home loan rates below 5% during an era of cheap debt.
“Although affordability continued to be tested by interest rate movements and simultaneously challenged consumer sentiment, purchasers remained responsive to increased sales incentives,” said Executive Chairman Stuart Miller.
Lennar (NYSE:) reported average price per home at $426,000 in the quarter ended May 31, down from $449,000 a year ago. The company delivered 19,690 homes versus 17,885 units a year ago.
Earnings came at $3.45 per share for the quarter, compared with analysts’ average estimate of $3.24 per share, according to LSEG data.
The company, however, forecast third-quarter home deliveries to be between 20,500 and 21,000 homes, the midpoint of which is marginally below analysts’ estimate of 20,917 homes.
Shares of the company were down about 1.8% after the bell.
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