Lennar, a major U.S. homebuilder, is down about 60%. The host disagrees with the bear case, arguing that rates do not need to fall because buyers will eventually accept 7% to 7.5% mortgage rates as incomes rise. America still needs more homes, the company is buying back shares consistently, and Berkshire Hathaway has aggressively added to its stake. If the business normalizes, profits could rebound strongly, and the stock looks very cheap versus its five-year average earnings and free cash flow. Therefore the host is bullish on LEN.

Homebuilder LEN is weak as the 30-year mortgage rate rose to 7.5% and purchase activity fell for a sixth week; the host holds a 30-share observation position and, with the Fed still hiking, will only watch for now, planning to buy more formally once hikes end and policy shifts to cuts.

Berkshire raised its LEN stake to about 10%, reflecting a focus on the longer-term US housing supply-demand gap rather than an immediate rebound in home sales. However, the increase does not mean short-term earnings pressure has ended or that the stock has bottomed; a real cyclical improvement for homebuilders depends on when mortgage rates fall. Those following Berkshire should scale in rather than go all-in.