Warren Buffett's Berkshire Hathaway has disclosed investments in three major U.S. homebuilders – D.R. Horton, Lennar, and NVR – totaling over $800 million. The investment coincides with a significant rise in U.S. homebuilder stocks, driven by a rebound in new home sales in 2023. D.R. Horton and Lennar have seen impressive year-to-date gains of 38.0% and 36.2%, respectively, with NVR up 33.5%, compared to the S&P 500's 16.3% growth. This growth is attributed to innovative affordability strategies by home builders, such as mortgage rate buydowns and price reductions, aimed at attracting buyers. The scarcity of existing inventory has further boosted demand for newly constructed homes, resulting in heightened sales for homebuilders. Deutsche Bank predicts a prolonged housing shortage due to supply constraints in the industry.
