Warren Buffett’s Berkshire Hathaway has bought roughly $212.4 million worth of Lennar (LEN) shares across three trading days in September, right after the homebuilder posted one of its weakest quarters in years.
The purchases took place between Sept. 17 and Sept. 21. Berkshire picked up 2.74 million shares across both Class A and Class B stock, pushing its total position in Lennar to about $1.4 billion. After the news broke, LEN shares rose 2.1% on Monday and gained another 1.2% in overnight trading.
Berkshire could have waited for prices to drop further. Instead, the team led by new CEO Greg Abel added heavily, and the size of the trade suggests the firm’s investment desk sees value that the broader market is currently overlooking.
Berkshire’s Lennar buy came right after a brutal third-quarter miss
Lennar reported third-quarter results on Sept. 16, and the numbers were not good. Net earnings dropped to $284 million from $591 million a year earlier, revenue fell 8.6% to $8.05 billion, and adjusted earnings per share came in at $1.23, missing the $1.28 consensus.
New home orders declined 9% to 20,879, and gross margin fell to 15.8% from 17.5%.
The company’s management also cut its full-year 2026 delivery outlook to 80,000 to 81,000 homes, from 82,000 to 83,000 previously, Proactive reported. Both Barclays and Royal Bank of Canada reduced their price targets on the stock in response, and Bank of America had already carried an Underperform rating heading into the report.
CEO Stuart Miller, who has led the Miami-based company for more than 25 years, said on the call that “interest rates and consumer confidence constrained the improvement that we anticipated going into the quarter.”
Miller also warned that “fewer families can afford to both produce a down payment and qualify for a mortgage.”
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What Lennar actually does, and why its margins keep shrinking
Lennar is one of America’s largest homebuilders. The company designs, builds, and sells new single-family homes and townhouses across the country, and it runs a financial services arm that provides mortgages, title insurance, and closing services to its buyers. That mortgage arm has become important to Lennar’s sales in a difficult housing market.
To attract buyers affected by high mortgage rates, Lennar has been temporarily lowering customers’ mortgage rates from around 7% to 5.5% by paying the difference itself.
Related: Lennar delivers harsh reality check for housing market
Those incentives protect sales volume, but they affect gross margin, which is why LEN’s profitability has kept declining in 2026.
Barclays cut its price target on Lennar to $70 from $79 on Sept. 20 while keeping an Underweight rating, and Royal Bank of Canada moved its target to $69 with an Underperform rating. Lennar shares closed near $78 on Monday, which is below the average analyst target of about $80, and the stock is down more than 22% year to date.
Taylor Morrison and D.R. Horton show Berkshire’s bigger housing bet
Berkshire’s move is part of a larger push into the housing sector under Greg Abel. In May, the conglomerate agreed to acquire Taylor Morrison for $72.50 per share in cash. The deal closed in July at about $6.8 billion in equity value and $8.5 billion in enterprise value, according to a press release.
Berkshire also holds a position in D.R. Horton, the country’s largest homebuilder by volume, and it already owns Clayton Homes, one of the biggest housing companies in the United States. With Lennar in the mix, Berkshire now has a bigger financial stake in the housing market than almost any other major investor.
More Housing and Berkshire Stocks:
- Lennar earnings report shows housing affordability squeeze
- Warren Buffett shares his final lesson before stepping back
- Mortgage rates hit 7% in 48 hours: Here’s what happened
“Berkshire is acquiring a best-in-class national homebuilder, led by an exceptional team and backed by a trusted reputation for customer experience,” Abel said when the Taylor Morrison deal was announced. His view appears to be that housing rewards patient capital, and Berkshire has plenty of it, with a cash pile of around $400 billion.
JPMorgan and others estimate the country has a shortage of homes, according to The Motley Fool, and that supply deficit has to close eventually.
What Lennar investors should think about before buying in
Lennar could keep falling if mortgage rates stay above 6.5% and the resale market keeps pressuring builders on price.
Miller himself warned that “active listings nationally are back above historic levels,” and that “when a resale seller cuts price, they are competing directly for our customer.”
Anyone buying Lennar today should be prepared for more margin losses before conditions improve. Berkshire’s own average cost on the position is estimated near $107 per share, which shows that even the world’s best investors are losing money on this bet right now.
Investors who want exposure to housing without betting on a single company can look at the iShares U.S. Home Construction ETF (ITB), which holds Lennar and other major builders. The main signal from Berkshire’s move is that this housing downturn will end at some point, though nobody knows when exactly.
Related: Zillow finds a bigger problem than high mortgage rates
