What Happened?
Shares of homebuilder Lennar (NYSE: LEN) jumped 4.3% in the morning session after a regulatory filing revealed that famed investor Warren Buffett's Berkshire Hathaway had taken a significant new stake in the homebuilder. The move is seen by investors as a major vote of confidence from the legendary investor in the U.S. housing market. This investment was one of three 'mystery stocks' that Berkshire had been accumulating with permission from the SEC to keep the purchases confidential while it built its position. Buffett's bet on homebuilders like Lennar suggests he may believe the worst is over for the housing sector, potentially seeing a long-term opportunity as the U.S. faces a need for more housing stock despite current high mortgage rates.
After the initial pop the shares cooled down to $133.27, up 2.2% from previous close.
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What Is The Market Telling Us
Lennar’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 3.7% on the news that an unexpectedly sharp rise in wholesale inflation fueled concerns about rising costs and their impact on corporate profits. The primary catalyst was the July 2025 Producer Price Index (PPI), a measure of inflation at the wholesale level, which jumped 0.9% against forecasts of a 0.2% rise. This represents the most significant monthly increase in over three years, pointing to mounting cost pressures for manufacturers, with tariffs cited as a key factor. This data complicates the Federal Reserve's upcoming interest rate decisions, as persistent inflation may prevent rate cuts, creating a headwind for cyclical sectors like Industrials.
Lennar is down 0.8% since the beginning of the year, and at $133.27 per share, it is trading 30.8% below its 52-week high of $192.45 from September 2024. Investors who bought $1,000 worth of Lennar’s shares 5 years ago would now be looking at an investment worth $1,729.
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