Lennar Corp ( LEN ) reported lower first-quarter profit on Thursday, as high mortgage rates and house prices deterred potential buyers, sending shares down 4% after the bell.

"While demand remains strong, persistently higher interest rates and inflation, combined with a downturn in consumer confidence and a limited supply of affordable homes, made it increasingly difficult for consumers to access homeownership," said co-CEO Stuart Miller.

For the first quarter ended February 28, Lennar ( LEN ) reported a decline in average sales price to $408,000, 1% lower than last year, reflecting continued weakness in the market. It also reported home sales gross margins of 18.7% in the first quarter, below its forecast range of 19.0% to 19.25%.

The lack of affordable entry-level housing for families has consistently been a major challenge in the U.S. economy and has routinely pushed potential first-time homebuyers out of the market.

Homebuilders have ramped up incentives such as interest rate buydowns and price adjustments to attract potential buyers and avert inventory buildup, which has reduced their margins.

Including losses of $62.5 million incurred on technology investments, Lennar ( LEN ) posted a quarterly profit of $1.96 per share, compared with $2.57 a year ago.

The second-largest U.S. homebuilder reported first-quarter revenue of $7.6 billion, a 5% rise from the previous year, surpassing analysts' estimates of $7.43 billion, according to data compiled by LSEG.

The Miami-based company delivered 17,834 homes in the first quarter, an increase from 16,798 units in the same period last year.