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Financial Instruments and Fair Value Disclosure
 12 Months Ended
Nov. 30, 2024
Fair Value Disclosures [Abstract]  
Financial Instruments and Fair Value Disclosure Financial Instruments and Fair Value Disclosures
The following table presents the carrying amounts and estimated fair values of financial instruments held or issued by the Company at November 30, 2024 and 2023, using available market information and what the Company believes to be
appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value. The use of different market assumptions and/or estimation methodologies might have a material effect on the estimated fair value amounts. The table excludes cash and cash equivalents, restricted cash, receivables, net, and accounts payable, all of which had fair values approximating their carrying amounts due to the short maturities and liquidity of these instruments.
At November 30,
20242023
Fair ValueCarryingFairCarryingFair
(In thousands)HierarchyAmountValueAmountValue
ASSETS
Financial Services:
Loans held-for-investment, netLevel 3$60,969 61,044 55,463 55,463 
Investments held-to-maturityLevel 3135,646 138,160 140,676 139,396 
LIABILITIES
Homebuilding senior notes and other debt payable, netLevel 2$2,258,283 2,264,375 2,816,482 2,785,712 
Financial Services notes and other debt payable, netLevel 21,930,956 1,931,515 2,163,805 2,164,441 
Multifamily notes payable, net Level 2— — 3,741 3,741 
The following methods and assumptions are used by the Company in estimating fair values:
Financial Services - The fair values above are based on quoted market prices, if available. The fair values for instruments that do not have quoted market prices are estimated by the Company on the basis of discounted cash flows or other financial information. For notes and other debts payable, the fair values approximate their carrying value due to variable interest pricing terms and the short-term nature of the majority of the borrowings.
Homebuilding - For senior notes and other debts payable, the fair value of fixed-rate borrowings is primarily based on quoted market prices and the fair value of variable-rate borrowings is based on expected future cash flows calculated using current market forward rates.
Multifamily - For notes payable, the fair values approximate their carrying value due to variable interest pricing terms and the short-term nature of the borrowings.
Fair Value Measurements
GAAP provides a framework for measuring fair value, expands disclosures about fair value measurements and establishes a fair value hierarchy which prioritizes the inputs used in measuring fair value summarized as follows:
Level 1:    Fair value determined based on quoted prices in active markets for identical assets.
Level 2:    Fair value determined using significant other observable inputs.
Level 3:    Fair value determined using significant unobservable inputs.
The Company’s financial instruments measured at fair value on a recurring basis are summarized below:
Fair Value at November 30,
(In thousands)Fair
Value
Hierarchy		20242023
Financial Services Assets:
Residential loans held-for-saleLevel 2$2,200,402 2,073,350 
LMF Commercial loans held-for-sale
Level 350,316 13,459 
Mortgage servicing rightsLevel 33,463 3,440 
Forward optionsLevel 11,458 5,937 
Lennar Other Assets:
Investments in equity securitiesLevel 1204,777 176,198 
Investments available-for-saleLevel 340,578 37,953 
Residential and LMF Commercial loans held-for-sale in the table above include:
November 30,
20242023
(In thousands)Aggregate Principal BalanceChange in Fair ValueAggregate Principal BalanceChange in Fair Value
Residential loans held-for-sale$2,263,310 (62,907)2,083,776 (10,426)
LMF Commercial loans held-for-sale
50,020 296 13,650 (191)
The estimated fair values of the Company’s financial instruments have been determined by using available market information and what the Company believes to be appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value. The use of different market assumptions and/or estimation methodologies might have a material effect on the estimated fair value amounts. The following methods and assumptions are used by the Company in estimating fair values:
Financial Services residential loans held-for-sale - Fair value is based on independent quoted market prices, where available, or the prices for other mortgage whole loans with similar characteristics. The Company recognizes the fair value of its rights to service a mortgage loan as revenue upon entering into an interest rate lock loan commitment with a borrower. The fair value of these are included in Financial Services’ loans held-for-sale as of November 30, 2024 and 2023. Fair value of servicing rights is determined based on actual sales of servicing rights on loans with similar characteristics.
LMF Commercial loans held-for-sale - The fair value of commercial loans held-for-sale is calculated from model-based techniques that use discounted cash flow assumptions and the Company’s own estimates of CMBS spreads, market interest rate movements and the underlying loan credit quality. Loan values are calculated by allocating the change in value of an assumed CMBS capital structure to each loan. The value of an assumed CMBS capital structure is calculated, generally, by discounting the cash flows associated with each CMBS class at market interest rates and at the Company’s own estimate of CMBS spreads. The Company estimates CMBS spreads by observing the pricing of recent CMBS offerings, secondary CMBS markets, changes in the CMBX index, and general capital and commercial real estate market conditions. Considerations in estimating CMBS spreads include comparing the Company’s current loan portfolio with comparable CMBS offerings containing loans with similar duration, credit quality and collateral composition. These methods use unobservable inputs in estimating a discount rate that is used to assign a value to each loan. While the cash payments on the loans are contractual, the discount rate used and assumptions regarding the relative size of each class in the CMBS capital structure can significantly impact the valuation. Therefore, the estimates used could differ materially from the fair value determined when the loans are sold to a securitization trust.
Mortgage servicing rights - Financial Services records mortgage servicing rights when it sells loans on a servicing-retained basis or through the acquisition or assumption of the right to service a financial asset. The fair value of the mortgage servicing rights is calculated using third-party valuations. The key assumptions, which are generally unobservable inputs, used in the valuation of the mortgage servicing rights include mortgage prepayment rates, discount rates and delinquency rates and are noted below:
November 30, 2024
Unobservable inputs
Mortgage prepayment rate8%
Discount rate13%
Delinquency rate12%
Forward options - Fair value of forward options is based on independent quoted market prices for similar financial instruments. The fair value     of these are included in Financial Services' other assets and the Company recognizes the changes in the fair value of the premium paid as Financial Services' Revenue.
Lennar Other investments in equity securities - The fair value of investments in equity securities was calculated based on independent quoted market prices. The Company’s investments in equity securities were recorded at fair value with all changes in fair value recorded to Lennar Other unrealized gains (losses) from technology investments on the Company’s consolidated statements of operations and comprehensive income (loss).
Lennar Other investments available-for-sale - The fair value of investments available-for-sale is calculated from model-based techniques that use discounted cash flow assumptions and the Company’s own estimates of CMBS spreads, market interest rate movements and the underlying loan credit quality. Loan values are calculated by allocating the change in value of an assumed CMBS capital structure to each loan. The value of an assumed CMBS capital structure is calculated, generally, by discounting the cash flows associated with each CMBS class at market interest rates and at the Company’s own estimate of CMBS spreads.
The changes in fair values for Level 1 and Level 2 financial instruments measured on a recurring basis are shown below by financial instrument and financial statement line item:
Years Ended November 30,
(In thousands)202420232022
Changes in fair value included in Financial Services revenues:
Loans held-for-sale$(52,482)(26,658)(33,287)
Mortgage loan commitments(44,106)1,016 43,695 
Forward contracts61,372 (28,431)(48,790)
Forward options(133)(522)(142)
Changes in fair value included in Lennar Other unrealized gains (losses) from technology investments: 
Investments in equity securities$25,180 (50,162)(655,094)
Changes in fair value included in other comprehensive income, net of tax:
Lennar Other investments available-for-sale$2,650 2,471 1,464 
Interest on Financial Services loans held-for-sale and LMF Commercial loans held-for-sale measured at fair value is calculated based on the interest rate of the loans and recorded as revenues in the Financial Services’ statement of operations.
The following table sets forth the reconciliation of the beginning and ending balance for the Level 3 recurring fair value measurements in the Company's Financial Services segment:
Years Ended November 30,
20242023
(In thousands)Mortgage servicing rightsLMF Commercial loans held-for-saleMortgage servicing rightsLMF Commercial loans held-for-sale
Beginning balance$3,440 13,459 3,463 25,599 
Purchases/loan originations463 568,520 200 466,043 
Sales/loan originations sold, including those not settled
— (522,647)— (430,707)
Disposals/settlements (1)(261)(9,500)(277)(45,667)
Changes in fair value (2)(179)296 54 (191)
Interest and principal paydowns— 188 — (1,618)
Ending balance$3,463 50,316 3,440 13,459 
(1)LMF Commercial includes $9.5 million of loans that was converted to loans held-for-sale during the year ended November 30, 2024.
(2)Changes in fair value for LMF Commercial loans held-for-sale and Financial Services mortgage servicing rights are included in Financial Services' revenues.
The Company’s assets measured at fair value on a nonrecurring basis are those assets for which the Company has recorded valuation adjustments and write-offs. The fair values included in the table below represent only those assets whose carrying values were adjusted to fair value during the respective periods disclosed. The assets measured at fair value on a nonrecurring basis are summarized below:
Years Ended November 30,
202420232022
(In thousands)Fair
Value
Hierarchy		Carrying ValueFair ValueTotal
Losses, Net (1)		Carrying ValueFair ValueTotal Losses, Net (1)Carrying ValueFair ValueTotal Losses, Net (1)
Non-financial assets
Homebuilding:
Finished homes and construction in progress (2)
Level 3$516,081 467,946 (48,135)458,569 396,795 (61,774)347,300 295,663 (51,637)
Land and land under development (2)
Level 3— — — 52,147 49,539 (2,608)135,844 126,135 (9,709)
Deposits and pre-acquisition costs on real estate (3)Level 35,120 — (5,120)19,914 — (19,914)47,893 — (47,893)
Investments in unconsolidated entities (4)Level 3— — — 78,834 37,792 (41,042)1,454 — (1,454)
Non-financial assets
Multifamily:
Land and land under development (5)Level 3$139,980 49,970 (90,010)— — — — — — 
Investments in unconsolidated entities (6)Level 324,753 — (24,753)— — — — — — 
(1)Represents losses due to valuation adjustments and deposit and pre-acquisition write-offs recorded during the respective periods.
(2)Valuation adjustments for finished homes and construction in progress, and land and land under development were included in Homebuilding costs and expenses.
(3)Forfeited deposits and write-off of pre-acquisition costs on real estate were included in Homebuilding costs and expenses in the Company's condensed consolidated statements of operations and comprehensive income (loss).
(4)Valuation adjustments related to Homebuilding investments in unconsolidated entities were primarily included in other income (expense), net in the Company's consolidated statements of operations and comprehensive income (loss) for the years ended November 30, 2023 and 2022, respectively.
(5)Valuation adjustments for land and land under development were included in Multifamily costs and expenses.
(6)Valuation adjustments related to Multifamily investments in unconsolidated entities were included in other income (expense), net in the Company's consolidated statements of operations and comprehensive income (loss) for the year ended November 30, 2024.
During the year ended November 30, 2023, the Company wrote off $65.0 million relating to one of the Company's non-public technology cost method investments which was recorded in Other income (expense), net and other gains (losses) in the Company’s consolidated statements of operations and comprehensive income (loss).
See Note 1 for a detailed description of the Company’s process for identifying and recording valuation adjustments related to Homebuilding inventory and investments in unconsolidated entities.