Mortgage rates' move above 7% is unwelcome news for home builders. Lennar's third quarter results and the company's forward guidance will reveal just how unwelcome it is.

Analysts estimate that Lennar, one of the nation's largest home builders with operations in over half of U.S. states, on Wednesday will report earnings of $1.28 a diluted share on $8.3 billion in revenue, according to FactSet. That's down from $2.29 a diluted share on $8.8 billion in revenue one year prior.

The company is expected to report 20,960 homes delivered and 21,473 new orders in the period-but investors will likely focus on gross margin on home sales. Analysts estimate Lennar's margin will be 15.9%-a figure that would be an improvement from one quarter prior but is lower than the 17.5% it reported one year prior.

Rising mortgage rates have long borne down on builders' margins. As mortgage rates rise, builders use incentives and discounts to make the sale and keep homes affordable for buyers, at the expense of their margins.

"Lennar has witnessed sales and profit deterioration over the past several years as volatile interest rates and reduced overall home affordability weigh on home buyers," StoneX analyst Michael Rindos wrote in a September report initiating coverage of the stock with a Hold rating.

Among the headwinds: "We think Lennar's customers-typically entry level buyers-will be slower to return because of their higher level of sensitivity to interest rates," Rindos wrote.

The second half of the year isn't typically as busy for buyers as the first half-and the 30-year fixed mortgage rates' recent rise of roughly 0.3 percentage point isn't likely to help. Sales of previously owned homes dropped in August, the National Association of Realtors said last week. Rates' rise on Tuesday to 7.22%, according to Mortgage News Daily, could dull demand further.

Investors will be listening for information on sales estimates that would influence fourth quarter and full-year earnings. On Tuesday, analysts were calling for full-year earnings of $5.46 a share on $32.3 billion in sales, and a 15.76% home sales margin.