Berkshire Lifts Lennar Stake as Homebuilders Flag Affordability Drag on Housing Market

Berkshire Hathaway (BRK.A, BRK.B) is expanding its U.S. housing bet even as major homebuilders warn that affordability pressures will weigh on the sector. The conglomerate recently raised its stake in Lennar (LEN), sending the builder's shares surging this week, after agreeing earlier this year to acquire Taylor Morrison in its first major deal under new CEO Greg Abel. The buying comes amid a sharp sector pullback. Lennar shares are down a third from their January highs, while the iShares U.S. Home Construction ETF (ITB) and SPDR S&P Homebuilders ETF (XHB) have each fallen about 20% from February peaks. On Sept. 22, KB Home (KBH) executive chair Jeffrey Mezger said rising borrowing costs and persistent inflation are making Americans "more cautious about buying a home," and the company warned affordability concerns would weigh on its current-quarter outlook. Lennar CEO Stuart Miller said higher fuel and electricity costs are moderating families' willingness to make major financial commitments.