Berkshire Hathaway Increases Lennar Stake to 11.2% as Buying Pace Slows

Warren Buffett’s Berkshire Hathaway has quietly increased its ownership in homebuilder Lennar, raising its stake to 11.2%, although recent data suggests the pace of accumulation has moderated. According to a Securities and Exchange Commission filing submitted late Wednesday, the conglomerate purchased an additional $53.6 million in Lennar Class A shares and $329,000 in super-voting Class B shares during the first three trading days of the week.

The latest purchases bring Berkshire’s total holding to approximately 26.6 million shares, valued at $2.1 billion based on Friday’s closing market prices. This marks a significant expansion from the end of the second quarter, when Berkshire held a 5.4% stake comprising 13.4 million shares worth $1.2 billion. The position had previously surged by roughly 30% from the first quarter and by 43% compared to the holdings at the end of the prior year.

Berkshire’s acquisition strategy remained hidden throughout the third quarter due to regulatory confidentiality rules that apply until an investor crosses a 10% ownership threshold. Once that benchmark was reached in mid-September, the company was required to disclose further transactions within two business days. Subsequent filings revealed that between September 17 and September 25, Berkshire acquired nearly $349 million in Lennar stock across six of seven trading days, averaging about $58 million per calendar day.

In contrast, the current week’s activity has slowed considerably. Through Wednesday, the average daily purchase came to just under $18 million. No new trading activity was reported for Thursday, lowering the four-day weekly average to approximately $13.5 million. Any transactions executed on Friday will not be visible until the Monday filing deadline.

While Berkshire appears to be positioning itself for a long-term rebound in the U.S. housing sector, Wall Street analysts express skepticism regarding Lennar’s near-term prospects. Morgan Stanley initiated coverage of the stock on Thursday with an “underweight” rating and a price target of $65 per share. This target implies a potential decline of nearly 19% from the stock’s recent close of $79.81.

The pessimism from analysts like Morgan Stanley reflects broader headwinds facing the housing market. According to the Mortgage Bankers Association, the average 30-year fixed mortgage rate has climbed to 7.30% over six consecutive weeks of increases, representing the highest level since late 2023. CNBC reporter Diana Olick notes that these elevated rates, combined with higher home prices compared to last year, are deterring potential buyers and weighing on demand.