Warren Buffett, the billionaire chairman and chief executive officer of Berkshire Hathaway Inc. (BRK/A), said the U.S. housing market has made progress and still has a way to go in recovering.
“It’s coming back,” Buffett, 83, said yesterday during an event at the New York Public Library. “Pricing is better in almost all markets by a reasonable percentage from a few years ago. Housing starts are up somewhat. They still are not where I would regard as an equilibrium point, where they match household formation.”
A rebounding housing market has helped Omaha, Nebraska-based Berkshire’s subsidiaries that make carpet, bricks, insulation and houses. Some of those businesses have expanded in recent years through acquisitions as the industry recovers from the worst slump in seven decades.
Buffett has been predicting a real estate revival for years and positioning his company to benefit from it. He said in early 2010 that the turnaround would probably begin “within a year or so.” While that call proved wrong, he has since reiterated that the industry would rebound because of increasing population and limited supply.
Berkshire also has invested in some of the nation’s largest mortgage lenders, including Wells Fargo & Co. (WFC) and Bank of America Corp.