The U.S. housing market remains stuck nearly five years after the pandemic, with mortgage rates above 7%, sticky inflation and rising home prices keeping existing home sales near 4 million a year, versus an average of 5.5 million before the pandemic. Homebuilder stocks have been flat for several years while the broader market surged. Still, Berkshire Hathaway has been aggressively buying into the sector: it acquired Arizona-based Taylor Morrison for $6.8 billion, combined it with Clayton, bought South Carolina homebuilder McGuinn, and nearly doubled its stake in Lennar to 11%, making Berkshire the nation's fourth-largest homebuilder. The author, however, sold part of the State Street homebuilder ETF, XHB, after more than two years at a loss, arguing that high rates, building costs, labor shortages, tariffs and price cuts have squeezed margins, and that relief may take years.
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