Buffett's Berkshire Is Going Long on Homebuilders. Here's Why I'm Moving in the Opposite Direction

With mortgage rates above 7% and home prices rising, the U.S. housing market has stayed stuck in a prolonged slowdown, leaving existing annual sales around 4 million versus about 5.5 million before the pandemic. Against that backdrop, investors betting on homebuilders to add inventory have often been disappointed, as the sector has been largely flat while broader markets have climbed. Still, Berkshire Hathaway has continued to build its homebuilding presence under CEO Greg Abel, including a $6.8 billion acquisition of Arizona-based Taylor Morrison to combine with Clayton Homes, plus purchases such as South Carolina builder McGuinn and growing stakes in Lennar, NVR, and D.R. Horton. The piece also notes why one investor exited a homebuilder ETF after years of losses.