Lennar stock was falling in after-hours trading after the builder missed third-quarter earnings estimates and blamed the worsening environment for buying homes.

Housing's headwinds worsened during the quarter as mortgage interest rates rose and consumer confidence fell. High housing costs "have driven more consumers to slow their purchase decision," said Stuart Miller, the chief executive at Lennar, the nation's third-largest home builder by market capitalization.

The results illustrate the relentless pressure of higher rates on home builders. Investors should pay attention, given that mortgage rates have risen even higher since Lennar's quarter ended in August.

Rising mortgage rates have long borne down on builders' profit 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. Fixed 30-year mortgage rates since the end of August have risen nearly 0.4 percentage point to 7.24% as of Wednesday, according to Mortgage News Daily.

Lennar shares were down 3.1% in after hours trading after closing 2.1% lower. The after-hours decline follows both its results, which were reported after the market closed, and the Federal Open Market Committee's decision to raise target rates, which weighed on real estate-related stocks during afternoon trading.

The builder reported earnings of $1.19 a share, or $1.23 excluding mark-to-market losses on technology investments and one-time items, on $8 billion in revenue, below the $1.28 a share on $8.3 billion in revenue analysts had expected, according to FactSet.

The company's gross margin on home sales was 15.8%, a hair lower than the 15.9% analysts had expected.

The results "reflect consistent focus on our operating strategy of maintaining volume and production while navigating a challenging economic environment," Miller said in a statement. "While our earnings of $1.19 per share were below expectations, they reflect the nature of the environment in which we are operating, which has deteriorated since our last earnings call."

The builder said in the fourth quarter it expects new orders in a range of 19,500 to 20,500 homes, and 22,000 to 23,000 deliveries. The gross margin it expects-in a range from 15.5% to 16%-is below the 16.2% analysts expect in the fourth quarter, according to FactSet.

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 won't help. Sales of previously owned homes dropped in August, the National Association of Realtors said last week.

Lennar will discuss its results and expectations on a conference call on Thursday at 11 a.m. Eastern.