June 25, 2019 / 10:31 AM / a month ago

UPDATE 1-Lennar profit beats as lower mortgage rates boost home sales

(Adds second-quarter details, share move)

June 25 (Reuters) - Lennar Corp reported a higher-than-expected quarterly profit on Tuesday, as the No. 2 U.S. homebuilder's sales got a boost from lower interest rates for mortgages, sending its shares up 4% before the opening bell.

Several years of rising rates had put a brake on parts of the U.S. housing market in 2018.

But a moderation in mortgage rates and house prices in 2019 has improved affordability, especially for first-time homebuyers who have been largely priced out of the market.

The 30-year fixed mortgage rate stood at an average of 4.14% in the week ended June 14, hovering at levels lowest since September 2017, according to data from Mortgage Bankers Association of America.

Orders at Lennar increased just 0.5% to 14,518 homes in the second quarter ended May 31, but were above the top end of the 14,000-14,300 range expected by the company.

Net earnings attributable to Lennar rose 36% to $421.5 million, or $1.30 per share in the second quarter ended May 31.

Total revenue rose 1.9% to $5.56 billion.

Analysts on average had expected earnings of $1.14 per share and revenue of $5.10 billion, according to IBES data from Refinitiv. (Reporting by Ankit Ajmera in Bengaluru; Editing by Maju Samuel)

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