Lennar Corp Class A
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
$734.00 | Ryzg | Rsrbncm |
Lennar Continues to Transform Into a More Capital-Efficient Homebuilder
Business Strategy and Outlook
US homebuilders enjoyed a robust demand environment from 2020-22 despite the pandemic. We believe several factors explain the pandemic-era housing surge, including increased suburban and cross-state migration (due in part to the rise of flexible work arrangements), government stimulus (which bolstered household savings), and record-low mortgage rates (which supported affordability despite rising home prices). However, home sales activity began to decline in 2022 as rising mortgage rates and high home prices reduced homeownership affordability. Total housing starts declined 3% in 2022 and another 9% in 2023.