Berkshire Hathaway slows Lennar share purchases after lifting stake above 11%

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Berkshire Hathaway ups Lennar stake

Highlights

Berkshire Hathaway bought $53.6 million in Lennar Class A shares and $329 thousand in Class B shares, lifting its stake above 11% and $2.1 billion total value.
After crossing the 10% threshold mid-September, Berkshire slowed its average daily Lennar purchases from about $58 million to $13.5 million through this week.
Lennar shares fell 2.8% Friday to $79.81 after Morgan Stanley initiated coverage with an underweight rating and a $65 price target, citing housing market pressures.

Recent purchases and disclosure timeline

According to CNBC, as disclosed in a filing with the U.S. Securities and Exchange Commission, Berkshire bought $53.6 million of Lennar Class A shares and another $329 thousand of the company’s super-voting Class B shares on Monday, Tuesday and Wednesday. Based on Friday’s closing prices, the position totals 26.6 million shares worth about $2.1 billion.

Berkshire owned 13.4 million Lennar shares, or 5.4%, at the end of the second quarter, valued at $1.2 billion. That holding was up nearly 30% from 10.3 million shares at the end of the first quarter, which itself was up 43% from 7.2 million shares held at the end of last year.

The company continues buying through the third quarter as Lennar shares weaken, keeping the purchases undisclosed until the stake reaches 10% in mid-September. Crossing that threshold triggers an SEC rule requiring Berkshire to report further transactions within two business days.

Two filings last week show Berkshire bought nearly $349 million of Lennar stock on six of the seven trading days between September 17 and September 25, an average of about $58 million per calendar day. This week’s average falls to just under $18 million through Wednesday, and with no new filing by Friday night, Berkshire appears not to buy on Thursday, bringing the four-day average to about $13.5 million. Any Friday activity is not known until after Monday’s filing deadline.

Housing market pressure and stock outlook

Berkshire’s investment suggests it is betting on a longer-term recovery for Lennar and the broader U.S. housing market, even as near-term conditions remain difficult. The market is struggling under the weight of higher borrowing costs, with the average 30-year fixed mortgage rate rising for six straight weeks to 7.30%, its highest level since late 2023.

Potential buyers are being discouraged by both elevated mortgage rates and higher home prices compared with last year. Morgan Stanley takes a more cautious near-term view on Lennar, starting coverage on Thursday with an underweight rating and a $65 price target, implying a drop of almost 19% from the stock’s Friday close of $79.81. Lennar shares close down 2.8% on the day.

Our earlier coverage on oil prices and Treasury yields ahead of third-quarter earnings explained how rising yields and the Fed’s anti-inflation stance were tightening financial conditions and weighing on overall market sentiment. We noted that while a late-week pullback in yields and crude provided some relief, market leadership remained narrow—concentrated in tech and AI—leaving investors focused on whether earnings could broaden the rally.

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