Is The Housing Cycle Finally Turning?
From our perspective, Berkshire Hathaway's (NYSE:BRK.B) agreement to acquire Taylor Morrison (NYSE:TMHC) is a pronounced signal that the worst of the current housing cycle is behind us.
As of May 2026, mid-cap builders were trading at just 0.75x book value, the steepest discount since April 2020. The "lock-in effect" of higher interest rates is measurably easing: by the second half of 2025, the share of homeowners with rates at or above 6% surpassed those below 3% for the first time since 2020.
The Taylor Morrison transaction will be the fourth take-private of a publicly traded homebuilder in the past twelve months, and fifth in two years, following the acquisitions of Tri Pointe Homes, United Homes Group, Landsea Homes, and MDC Holdings. Collectively, these transactions represent approximately 30,000 annual closings, or roughly 4.5% of national new home sales. That represents a meaningful concentration of supply shifting into the control of long-term oriented owners. The top 10 builders now have 46% market share, up from 27% a decade ago. Sophisticated and long-term oriented acquirers commit when they believe the entry point is attractive and the forward outlook is improving.
Berkshire's counter-cyclical investment track record is extensive – from BNSF Railway at the depths of the financial crisis and Goldman Sachs days after the Lehman Brothers collapse, to Bank of America while it was still reeling from the Great Recession and Occidental Petroleum when the market had written off oil. The Taylor Morrison deal fits squarely into that lineage: a large, all-cash commitment and a long-term thesis rooted in America's structural needs.
Margaret Whelan was featured in CNBC's coverage of the announcement:
“What it says is that very sophisticated buyers believe valuations have bottomed. If they thought the market was still going down, they would wait and pay less. Maybe it bounces along the bottom for two years — I doubt it. I believe we have pent-up demand and we’ll start to see growth in spring 2027."