Lennar Corporation and KB Home both flagged rising cost pressures during their latest earnings calls, pointing to data-center-driven labor shortages, tariffs and inflation as headwinds for the housing market. On Lennar's third-quarter call in September, chairman, president and CEO Stuart Miller said labor availability is definitely one of geography, citing data centers, sporadic immigration crackdowns and tariffs, while executive vice president for homebuilding David Collins said roughly 20% of the company's divisions are seeing greater pressure than the vast majority. Miller added that the shortage shows up unevenly by trade, with landscaping an example, and said the resale market is becoming more and more of a competition, though chief operating officer Jim Parker noted increased resale activity can also unlock more move-up buyers. KB Home President and CEO Rob McGibney said his company has built direct fuel surcharges into trade contracts so they can be extracted immediately if fuel prices pull back, and expects slightly higher sequential direct costs for fourth-quarter deliveries after experiencing increasing cost pressure from fuel, general inflation and tariffs. Lennar's third-quarter revenue of $8.05 billion missed analyst estimates with new orders down 9% year-over-year, while KB Home posted a third-quarter beat with $1.297 billion in revenue and $1.05 per share. Lennar's shares were down 0.72% to $81.00 in premarket trading on Thursday, while KB Home stock declined about 2.09% to $45.50.
KB HomeKB Home expects higher sequential direct costs from fuel, inflation and tariffs, building fuel surcharges into trade contracts.
Lennar CorporationLennar flagged data-center-driven labor shortages, immigration crackdowns and tariffs as cost headwinds, with new orders down 9% YoY.
