Berkshire's Greg Abel makes long-term bet on U.S. homebuilders
Berkshire Hathaway under Greg Abel has made three major homebuilding moves, including acquiring Taylor Morrison and nearly doubling its Lennar stake. Abel said the Taylor Morrison deal reflects a long-term bet on U.S. housing and the American dream. Lennar's shares and margins have suffered as the builder cuts prices and incentives amid weak affordability and high mortgage rates.
After Greg Abel took over as Berkshire CEO on Jan. 1, the conglomerate completed several housing-related transactions. It agreed in late May to buy Taylor Morrison for $6.8 billion in equity, or about $8.5 billion with debt; that deal closed in July. Its Clayton unit’s Mungo Homes also purchased South Carolina-based McGuinn Homes.
Berkshire then raised its Lennar holding by 94% in the third quarter, giving it about 11% of the builder. Abel described the Taylor Morrison purchase as a long-term wager on U.S. housing, while acknowledging near-term turbulence.
Berkshire’s expansion into homebuilding could influence how many homes are built and at what prices, potentially affecting buyers, renters, construction workers, and local communities. If its long-term bet helps sustain production through a weak market, it may support housing supply and jobs; if builders keep cutting prices and incentives, existing homeowners and investors could see mixed effects. The outcome may depend on mortgage rates and affordability.