Toll Brothers profits tripled in 5 years while revenue grew 55 percent
Toll Brothers and Lennar grew revenue by about 50 percent in five years.
The short version
- Toll Brothers profits tripled while Lennar earnings fell 16 percent.
- Toll Brothers homes averaged $960,000 compared to Lennar at $391,000.
- Luxury buyers with equity and cash changed the margins.
Two of America's largest homebuilders increased revenue by about 50 percent over five years, but their profits moved in opposite directions according to HousingWire. Toll Brothers, the luxury Homebuilder founded in 1967, saw its net income triple by 201 percent while Lennar, the major national homebuilder, earned less than it did five years earlier despite generating nearly $12 billion more in annual revenue.
The difference came down to buyer mix, incentives, margins, and brand power. Toll Brothers operated in a higher price bracket, with an average delivered home price of about $960,000 in fiscal 2025, compared with Lennar at about $391,000. About 70 percent of Toll buyers were move-up or move-down households with existing home equity, and 26 percent paid in cash.
Douglas Yearley, the chief executive officer of Toll Brothers, said the company's mortgage rate buydown take rate was very low because its buyers did not need a lower rate to qualify for a mortgage. That shifted the demand equation away from payment sensitivity.
In fiscal 2025, Toll reported a 25.6 percent gross margin on home sales, while Lennar reported 17.7 percent, leaving a gap of almost 10 points per home sold. When demand softened, builders chose between cutting margins with incentives or protecting profit. Lennar ran about 14 percent in incentives and price adjustments, while Toll averaged about 8 percent.
In 2026, Fortune named Toll the number one Homebuilder on its World's Most Admired Companies list. For your own business, the lesson is clear: chasing volume without watching your margins can leave you working harder for less at the end of the day.
