Buffett’s successor says Americans are ‘struggling’ after $6.8B housing bet. Turn the ‘bumpy road’ into real wealth now

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Berkshire Hathaway CEO Greg Abel sees the pain spreading through America's housing market. He is also betting billions that it will eventually pass.

"There's a consumer that is still clearly feeling the pain, and struggling, and having to stretch a lot further with that dollar," Warren Buffett's successor told CNBC (1).

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Abel said Berkshire saw no evidence of an immediate housing recovery and expected a "bumpy road for a while."

That warning arrived shortly after the conglomerate paid $6.8 billion for homebuilder Taylor Morrison, one of Abel's first major acquisitions since taking over as CEO.

The apparent contradiction reveals something important about Berkshire's investing strategy. Abel is separating today's affordability crisis from America's long-term need for housing.

Berkshire expects Taylor Morrison to become a "very strong asset" over the next five to 10 years as more Americans pursue homeownership. It also owns stakes in competing homebuilders Lennar and D.R. Horton.

While individual investors may not have Berkshire's enormous cash pile, they can apply the same basic principle: Buy assets with long-term potential without betting money they will need during the bumpy years.

Berkshire is buying while the housing market struggles

Single-family housing starts dropped to a seasonally adjusted annual rate of 808,000 in July, down 9.9% from June (2). Overall housing starts were 13.5% lower than one year earlier.

Higher mortgage rates have placed homes beyond the budgets of many would-be buyers, while elevated costs have also made it more expensive for builders to acquire land, finance projects, and construct new properties.

The longer-term problem has not disappeared. Freddie Mac estimated that the country was still short approximately 3.7 million homes (3) as of the third quarter of 2024.

That leaves Berkshire wagering on two realities at once: buyers might be struggling today, but Americans will continue needing places to live.

Real estate investors can pursue that long-term demand through several kinds of properties and investment structures. The right entry point depends on how much money you can commit, whether you qualify as an accredited investor and how long you can afford to leave your capital invested.