Berkshire Hathaway Inc. has amassed a $2.2 billion stake in Lennar Corp., putting the conglomerate in position to overtake Vanguard Group Inc. as the homebuilder's largest shareholder.
Berkshire bought $53.9 million worth of Lennar shares in the last three days of September, according to a regulatory filing. The firm now owns 11% of the homebuilder, narrowly behind Vanguard's 11.2%.
The September buying spree is the latest sign of Chief Executive Officer Greg Abel's optimism about the beleaguered US housing market. Berkshire is already one of the biggest US homebuilders after its July acquisition of Taylor Morrison Home Corp. for $6.8 billion.
READ MORE:
Along with Clayton Homes Inc. and a smaller investment in NVR Inc., Berkshire's housing portfolio now stretches from
Berkshire didn't respond to requests for comment, and Lennar declined. But Abel discussed his view on the housing market on CNBC in early September shortly before the buying binge began.
"We don't envision a quick recovery there," Abel said. "But we do see it as an industry that we definitely want to be invested in, and we're invested for the long-term."
Lennar, like other homebuilders, has been battered by inflation and rising interest rates. The costs of construction materials and labor are up, reflecting the combined effects of the Trump administration's tariffs, war in Iran, and immigration policy.
Those dynamics are squeezing the industry across the board: The S&P Composite 1500 Homebuilding index is down 7.9% year-to-date. Lennar, though, has been one of the benchmark's worst performers, falling 21% from the beginning of the year.
The company's struggles stem from its strategic decision to stop buying undeveloped parcels of land, in line with industry trends to reduce the risks associated with owning land long before it's buildable. In early 2025, the company completed a years-long effort to spin off $5.5 billion worth of land into a new publicly traded company called Millrose Properties.
That strategy is known as "going land-light," pioneered by NVR in the late 1990s and adopted by D.R. Horton Inc. and others after the financial crisis. "It's a matter of Lennar trying to diversify their land risk," said Maurice Austin, a director and credit analyst at S&P Global Ratings who covers Millrose. "If there's another market crash, they won't have that land on the balance sheet."
But Lennar went further, keeping less than 2.5% of its land, compared with 22% at D.R. Horton. At the same time, Lennar also agreed to take lots from Millrose on a stringent predetermined schedule. Given the slump in demand, Lennar has had to choose between building homes that it can only sell at a discount, or paying Millrose a fee to walk away — a move that could hurt the rest of the portfolio.
Some analysts question whether Lennar truly eliminated risk. The spinoff replaced traditional land ownership with a rigid, costly third-party financing structure, according to Raymond James equity analyst Buck Horne.
"The street has been wrestling with this over time," Horne said. "It's why Lennar has decoupled from its peers — it's the complexity of what they've entangled themselves with."
Despite Wall Street's disappointment, the strategy seemed to find support in the White House. Roughly a year ago, President Donald Trump let loose on the nation's largest builders, blaming them for high home prices. He accused them of sitting on land and deliberately withholding supply.
READ MORE:
"They have to start building Homes," he
Lennar Chief Executive Officer Stuart Miller took Trump's rhetoric as a signal that the government was ready to take action to help homebuyers. For Lennar, the prospect mattered more than it did for many of its rivals. A meaningful improvement in affordability, through lower borrowing costs, federal policy or both, offered the possibility of filling its production pipeline without giving away so much margin.
But this summer's
"The impact from Millrose is worse than we previously modeled, and worse than I think management expected," Rahmani said. "I don't think politics is going to get them through this."
In a recent call with analysts, Miller said he still believes that federal or state action is likely, but "it's taken longer than I would've liked." For now, even as other homebuilders slow down production to match diminished demand, the company is heeding the administration's call to continue building, letting the margins fall to close to 2008 levels.
Even still, Berkshire's purchases signal trust in Lennar's long-term future. When and if demand picks up, the company's new structure is expected to pay off.
"It's really just a vote of confidence in the long-term outlook for housing and a bet on Lennar having torque to an eventual market rebound," Bloomberg Intelligence's Drew Reading said.
Berkshire's growing stake only gives it so much influence. Miller, who has held the title of CEO, chairman or both since 1997, owns more than two-thirds of Lennar Class B shares, granting him about 42% of the firm's total voting rights.
