Berkshire adds to nearly doubled stake in slumping homebuilder

(This is the Warren Buffett Watch newsletter, news and analysis on all things Warren Buffett and Berkshire Hathaway. You can sign up here to receive it every Friday evening in your inbox.)

Berkshire Hathaway has increased its bet on a long-term recovery for the struggling U.S. housing market by nearly doubling its stake in Lennar, the nation's second largest homebuilder, since the beginning of July.

As of late Friday, Berkshire reports owning almost 25.4 million shares of LEN and another 549 thousand of its Class B super-voting shares for a total of 25.9 million shares, currently valued at $2.1 billion.

That's 10.9% of Lennar's roughly 238 million shares outstanding for both classes.

And it's a 93% increase from the 13.4 million shares Berkshire owned as of June 30, according to the company's mid-August SEC 13F portfolio snapshot filing for its second quarter.

Despite the big increase, it's still a medium-to-small sized position by Berkshire standards and is likely the work of portfolio manager Ted Weschler.

For most of the stocks in its portfolio, we will have to wait until mid-November for the next 13F to find out whether Berkshire was buying or selling during its third quarter ending this coming Wednesday.

In this case, however, Berkshire had to quickly disclose its stake had hit 10% on September 21 under an SEC rule that defines any holder at or above that trigger as an "insider" potentially able to "change or influence company management and policies."

The rule also requires that any additional transactions must be disclosed within two business days.

On Monday, Berkshire reported buying Lennar shares worth $212.4 million between September 17 and September 21. 

Another filing after Friday's closing bell disclosed an additional $136.4 million of purchases Wednesday, Thursday, and Friday.

Lennar's stock price was up as much as 6.8% in Tuesday's trading after the first filing the night before and held much of it for a four-day gain of 5.2%.

Berkshire's Q3 buying came as the stock fell 9.2% through Friday's close. It's down 20.1% so far this year.

Last week, Lennar's quarterly earnings came in below Wall Street's forecast and revenue fell 8%.

Its forecast for the current quarter was also disappointing, with the CEO telling analysts houses are less affordable and there are fewer qualified buyers with 30-year mortgages hitting 7%.

CNBC.com quotes CFRA Research analyst Cathy Seifert as saying it's a "classic Berkshire value play."

She points out Berkshire has a "pretty significant presence" in housing following CEO Greg Abel's $6.8 billion acquisition of Taylor Morrison Home, announced in June. He plans to combine its operations with Berkshire's Clayton Homes.

Earlier this month, Abel said in a CNBC interview that while he does not see "any type of immediate recovery" for U.S. homebuilders, he expects Taylor Morrison will be a "very strong asset" five to 10 years from now because the "American dream will continue to exist."

The company's other housing and home improvement subsidiaries include Shaw Industries, Johns Manville, and Benjamin Moore. 

At Barron's, Andrew Bary suggests Berkshire "probably would like to buy all of Lennar," and could afford it at a cost of approximately $25 billion, but may be coming up against Chairman and CEO Stuart Miller's 70% ownership of the company's controlling Class B shares.

"One issue could be that the Millers think Lennar stock is undervalued-trading for less than half its 2024 high of almost $200 and below book value-and aren't interested in selling even at a premium to the currently depressed price."

The GEICO Gekko and several of the insurer's other advertising characters, including the Caveman and Caleb the "Hump Day" camel, will be featured on a "Road Trip to Parade" float at this year's Macy's Thanksgiving Day Parade, according to a news release this week.

It is the first time the Berkshire Hathaway subsidiary, which is celebrating its 90th anniversary, has participated in the event.

The first parade was in 1924, but it was canceled during World War II, so this is the department store's 100th march along the streets of Manhattan.

Before the parade, the Gecko will headline a 10-week promotional tour from San Francisco to New York, stopping in 12 cities.

Berkshire Cash as of June 30: $365.5 billion (Down 8.0% from March 31)

Excluding Rail Cash and Subtracting T-Bills Payable: $359.2 billion (Down 3.8% from March 31)

Berkshire repurchased $4.5 billion of its shares in Q2 2026.

Berkshire's top holdings of disclosed publicly traded stocks in the U.S. and Japan, by market value, based on the latest closing prices.

The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.

Please send any questions or comments about the newsletter to me at alex.crippen@cnbc.com. (Sorry, but we don't forward questions or comments to Buffett himself.)

Also, Buffett's annual letters to shareholders are highly recommended reading. There are collected here on Berkshire's website.