Finance
Two big homebuilders missed Wall Street estimates on a key metric — here's why
Housing demand has been hard to forecast even as mortgage rates have declined. Just take a look at homebuilders’ quarterly results so far this earnings season.
Two of America’s largest homebuilders, Lennar (LEN) and KB Home (KBH), reported third quarter net new home orders that have fallen short of Wall Street expectations.
Net new orders represent the number of new sales contracts that have been finalized and signed by buyers minus customer home order cancellations booked for the period. Investors and analysts pay close attention to this figure because its a leading indicator for homebuilders on housing activity.
Lennar, the nation’s second-largest homebuilder, said last month that its net new orders for the quarterly period ending Aug. 31 rose 4.7% from the prior year to 20,587. That fell short of analysts’ forecasts of 20,827 orders, per Bloomberg data.
Homebuilder KB Home also reported in September that net orders for the period ending Aug. 31 were a disappointment. The builder said orders fell 0.4% from the prior year to 3,085, lower than analysts’ estimates of 3,345 orders.
Part of the reason for the misses is that it’s been hard to determine how much recent mortgage rate movements would affect buyer demand. Mortgage rates have stayed stuck between 6% and 7% this year. And in June, rates were toggling just above or below 7%.
Read more: When will mortgage rates go down? A look at 2024 and 2025.
“Maybe shame on us for not modeling it more clearly, but June and July were clearly challenging months,” John Lovallo, senior equity research analyst at UBS, told Yahoo Finance in an interview.
From a buyer’s perspective, “there was uncertainty about where rates were going. There was uncertainty about where the economy and the Fed were going, and there was growing uncertainty about the election,” Lovallo added.
The uncertainty doesn’t appear to be going away despite the Federal Reserve’s jumbo interest rate cut in September. Mortgage rates had already been on the decline as investors had bet on a rate reduction ahead.
It’s unclear how much they’ll fall. Data from Freddie Mac shows the average 30-year fixed mortgage rate jumped by 20 basis points to 6.32% last week. This marks the biggest week-over-week increase since April.
Read more: Is this a good time to buy a house?
Goldman Sachs revised its year-end forecasts in early October for 30-year conforming mortgage rates, lowering them to 6% for this year and 6.05% for 2025, down from the previous estimates of 6.5% and 6.1%.
The firm’s strategists said in the note that there’s “limited room” for major declines. They think “the decline in mortgage rates has largely run its course.”
Lovallo warned that it’s highly likely that the other homebuilders will report misses on Q3 net orders due to rate volatility this summer. More builders are gearing up to report quarterly earnings in the next few weeks with PulteGroup (PHM) and NVR (NVR) reporting on Oct. 22 and DR Horton (DHI) on Oct. 29.
Dani Romero is a reporter for Yahoo Finance. Follow her on X @daniromerotv.
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance
The UK’s financial regulator should consider expanding its oversight to cover advanced artificial intelligence models used in financial services, according to a review commissioned by the Financial Conduct Authority (FCA), as policymakers assess whether existing rules can keep pace with rapidly evolving AI technology.
The Monetary Authority of Singapore (MAS), the city state’s central bank and financial regulator, has joined forces with major financial institutions and FinTechs to release a white paper aimed at keeping AI agents in finance operating within safe limits.
The paper, called Safeguards for Agentic Finance at Runtime (SAFR), lays out an industry-built framework designed to let AI agents perform financial tasks in a manner that is safe, secure and dependable. It has been produced under BuildFin.ai, the MAS programme that backs the responsible creation and rollout of AI tools across the financial sector.
The push comes as AI agents take on more autonomous work at a pace that makes hands-on human oversight impractical. In response, firms require real-time controls that keep agent behaviour inside the mandates, policies and risk limits they have defined. SAFR answers this with a series of governance checkpoints that check and log each action an agent proposes before that task is carried out.
The framework extends the AI Risk Management toolkit created through MAS’ Project Mindforge, concentrating on how protections can be put into practice at the moment an agent acts. The white paper maps out how measures such as policy bound execution, real time validation, auditability and interoperability can be woven into system operations, giving institutions the confidence to deploy agents consistently.
Industry participants have already tested SAFR in several settings. These include agent-assisted payments and treasury work, where agents handle routine transactions inside set mandates to cut friction and lift efficiency; wealth management and advisory processes, where agents examine documents and produce structured assessments within tightly defined task limits to speed up compliance reviews; and client engagement, where agents create insights and draft materials within approved content boundaries so staff can serve clients more productively.
Stay ahead of the regulatory curve. Subscribe to FinTech Global’s newsletter today, and read the daily FinTech news for the strategic intelligence and early insight industry leaders rely on.
Copyright © 2026 FinTech Global
Investors
The following investor(s) were tagged in this article.
Talking about finances can be stressful, but it’s even more stressful if you’re not sure what advice is good and what advice might put you in a worse position than you started in.
Recently, a Reddit user who goes by market_vision1 asked, “What is the worst financial advice people still repeat?” I took out a little pen and paper while I was reading through these, like, “Lemme write that down. And that. Oh! And that, too!” I’m curious what you think, though. Are all of these things we should avoid financially?
1. “One of the more damaging ideas out there is ‘Oh, you’re young, don’t worry about money, just go have fun and worry about it when you are older.’ Of course, the number one regret I hear from clients nearing retirement is that they wish they had just started saving when they were younger.”
—u/hems86
2. “The ‘tax bracket’ myth should be illegal. My uncle turned down a $10K raise because he thought he’d ‘lose money.’ He literally paid $10,000 to avoid $2,200 in taxes. That’s not a tax strategy. That’s a $7,800 donation to the Dumba— Fund, and he’s the chair.”
—u/Serious_Cress5040
Related: “31 Things Only Super Wealthy People Can Buy That You Probably Don’t Even Know Exist”
3. “People living outside of their means and not realizing it. They say things like, ‘You deserve X, don’t settle for less.’ Most of the people I see who are broke are not 100% victims of the system. The majority of people waste their money on dumb stuff that they can’t afford. They’ll tell me they’ve cut out all unnecessary spending, but when I look at their actual expenses, I see otherwise. Spending $800 a month on DoorDash, financing a new car with a $900 monthly payment, going on international vacations, spending 70% of their income on rent in a fancier apartment when there are options for cheaper living.”
—u/hems86
4. “I’m a financial planner, and some of the worst advice I’ve ever heard is ‘Don’t pay off your credit cards in full. Carrying a balance on your credit card builds your credit; paying it off every month hurts your score.’ People say this to me all the time when I ask why they carry a balance on their card with 25% interest when they have more than enough to pay it off.”
—u/hems86
5. “It’s not so much advice as it is a financial choice. I know people who are taking out 96-month loans on cars they never should’ve considered in the first place, just because they can make the car note when it’s stretched over eight years. They never considered the interest on the loan plus the rate cars depreciate and are befuddled when they can’t afford to trade it in.”
-
Nevada2 minutes agoU. Nevada Reno department merger will study social life via ‘intersectional, decolonial, humanistic’ lens | The College Fix
-
New Hampshire8 minutes agoSeacoast Double Shooting | Escapee Captured | 10-Year Preservation Plan Released: PM Patch NH
-
North Carolina13 minutes agoSIGN: Pass Duke’s Rescue Act to Protect Dogs and Cats in North Carolina
-
New Jersey15 minutes agoNew Jersey Underground Railroad camp brings history to life for students
-
New Mexico18 minutes agoRoswell UFO Festival organizers share 2026 attendance numbers
-
North Dakota30 minutes ago
ND ATTORNEY GENERAL TO RELEASE 2025 CRIME STATISTICS – North Dakota Attorney General
-
Ohio32 minutes agoVeteran Officer Among 4 Dead in Ohio Shooting
-
Oklahoma38 minutes agoFFA members attend Oklahoma FFA Alumni Leadership Camp
