Homebuilder Lennar Sold More Than 700 Homes to a Company It Created, and Without 356 Purchases in the Final Week It Would Have Missed Its Target

Homebuilder Lennar has landed in a storm of questions after an investigation by Hunterbrook found it sold more than 700 homes, worth about $200 million, to a company it created, all in a single month. According to the report, a flurry of those sales came right at the end of a quarter, and without 356 purchases in the final week, Lennar would have missed its own delivery forecast.

Aerial view of a suburban neighborhood of new homes

Real estate YouTuber Michael Bordenaro says the story was sent to him by several viewers, so he broke it down in a recent video. It is a tale of a struggling builder, a related company and a housing market that has gone very quiet.

A Builder Squeezed From Every Side

To understand why a company might make a move like this, Bordenaro starts with the mood among builders. The National Association of Home Builders’ confidence reading fell three points in October to 29, the lowest since June of 2012, when prices were bottoming out after the 2008 housing crash. That is the weakest reading in 14 years.

He points to high mortgage rates, pricier construction loans and buyers who are sitting out because they cannot afford today’s prices. In October, 43% of builders cut prices, the highest share going back to 2020, and the average cut was 6% for the seventh month in a row. About 60% of builders are offering incentives, something that has gone on for 19 months straight.

Lennar’s own numbers, as Bordenaro lays them out, are rough. Its share price is down 55% over two years and 19% over five. Quarterly earnings fell 51% from a year earlier, home sale revenue dropped 6%, new orders slid 9%, and the average selling price slipped to $372,000. Buyer incentives are sitting at about 12% of the purchase price.

What the Hunterbrook Report Found

Milrose Properties is a separate company that Lennar created in 2025. It was designed to hold land that Lennar could buy as needed for construction. In August, according to the report, the terms changed so Milrose could also buy finished homes and operate them as rentals. In one month, Lennar sold Milrose more than 700 homes worth about $200 million.

Bordenaro says that is why he calls it a scandal. The report says Lennar supplied 72% of Milrose’s revenue in the preceding quarter, and that Lennar CEO Stuart Miller holds 43% of Milrose’s voting power. In Bordenaro’s words, that means the same man is calling the shots on both sides of the deal.

The timing is what really stands out. Hunterbrook identified 356 homes bought by Milrose during the final week of Lennar’s fiscal quarter. Lennar had forecast at least 20,500 deliveries and reported 20,840. Take away those 356 and the total drops to 20,484, which is short of the forecast. According to the report, Lennar missed its other four targets for orders, selling prices, margins and overhead, so deliveries were the one number that came in looking good.

The Florida House Example

The report singles out a brand-new home in Wesley Chapel, Florida. It was listed at $490,990 in April, and by August the asking price had fallen to $420,490. Property records show Milrose bought it for roughly $80,000 below that, about the kind of discount an ordinary buyer might have negotiated. Instead of a family, the buyer was Milrose, and the house was put up for rent at $2,825 a month.

Bordenaro ran the numbers on his mortgage calculator. Assuming 10% down and a 30-year loan at 7.5%, he puts the monthly cost of owning that house at about $3,100, so renting it runs roughly $300 less. He notes that Lennar’s incentives could narrow the gap, but owners also pay for every repair themselves, while a tenant calls the landlord.

He also questions whether Milrose makes money on its own. He says the company expects around a 5% annual return on the homes it rents, before financing and corporate costs, yet its newly issued bonds carry interest rates in the range of roughly 6.5% to 6.75%. In his view, the company would be paying more in interest than it takes in from rent.

A Market That Has Nearly Stopped

All of this is happening while buyers are scarce. Bordenaro cites the National Association of Realtors, which reported pending home sales fell 7.3% in September from August and are down 11.3% from a year earlier. Economists had expected a drop of only 0.5%. He says it is the lowest reading since the group began tracking in 2001, lower than after the dot-com bubble, the 2008 crash or the pandemic.

The realtors’ group blames mortgage rates, and Bordenaro agrees they matter but says prices are part of the problem too. Nearly half of homeowners still hold mortgages under 4%, which gives them little reason to sell and trade into a 7% loan. Home sales this year could land around 3.9 million, versus 5 million to 6 million in a healthy year, which hurts mortgage brokers, title companies, agents and builders alike. He notes that Goldman Sachs expects affordability to keep weighing on activity.

What Buyers Can Take From It

For anyone shopping for a house, the bright side is that builders are motivated. Bordenaro says buying a new Lennar home with incentives can be a far better deal than most resale homes, given that the median resale price is around $412,000. But he cautions that many buyers have complained about poor quality and workmanship in new builder homes, so an independent inspection before closing is worth every penny.

A Virginia real estate agent quoted in a news story he cites suggests looking at how long a home has been listed. If it has sat for a month or more, the seller may be ready to cut the price, and the listing description can offer clues. Bordenaro adds that plenty of listings sit at the same price for six months or a year, so patience and a firm number are your friends.

He also reminds viewers that this slump is different from 2008, when prices fell about 33% nationwide over roughly five years. This time, he says, prices are sliding more slowly, and he believes they must eventually come down to what buyers can afford. Until then, builders, sellers and buyers are stuck in a standoff, and stories like the Lennar and Milrose deal show how far some companies will go to keep the numbers looking good.

Willow and Hearth