Investors Are Avoiding This Industry Like the Plague. Berkshire Is Going All In. Should You Invest?
2026-10-26 14:00
•Matthew Benjamin •The Motley Fool
• ••••• Axe Cap view
Berkshire Bets Big on U.S. Housing While Investors Shy Away
Berkshire Hathaway is doubling down on a struggling U.S. homebuilding sector, but South African investors should think twice before following suit directly.
The U.S. housing market has lost its shine lately, with pending sales down sharply and homebuilder shares like Lennar down over 35% in a year. Rising mortgage rates here and abroad have cooled demand. Berkshire Hathaway’s bold move—buying Taylor Morrison and beefing up its Lennar stake—speaks to a long-term housing shortage of 10 million homes. Yet, this bet requires steady nerves and time, a luxury many investors don’t have. For South Africans, jumping into U.S. homebuilders directly is risky given the near-term headwinds and rand volatility against the dollar. Instead, exposure through broad USD/ZAR plays or blue-chip local financials like Standard Bank or FirstRand—who benefit indirectly from global economic trends—makes more sense. But if the U.S. housing market rebounds sooner than expected or rates fall drastically, Berkshire’s approach could pay off quicker than most anticipate. this is just our opinion and not financial advice
Avoid direct homebuilder stocks like Lennar for now due to weak fundamentals and FX risks. Prefer exposure to Standard Bank and FirstRand for steadier financial sector gains tied to global dollar strength and local credit demand.
- Lennar (LEN)
- Standard Bank
- USD/ZAR
- U.S. interest rate cuts boosting housing sooner than expected
- Rand weakening sharply against the dollar, increasing imported inflation and pressure on local equities
6/10
The U.S. housing industry is struggling with pending home sales down 7.3% month-over-month and 11.3% year-over-year, causing investors to flee homebuilder stocks. However, Berkshire Hathaway is making significant investments in the sector, including acquiring Taylor Morrison for $6.8 billion and increasing its stake in Lennar to 11%. Berkshire CEO Greg Abel views the 10-million-home housing shortage as a long-term opportunity, though he cautions recovery won't be quick. The article suggests ordinary investors should consider buying Berkshire shares rather than directly investing in homebuilders given the volatility and patience required.
Our take is based on reporting first published by The Motley Fool.
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