Snowball

Warren Buffett would have been a poor man if he grew up in Florida instead of Omaha. See, my daughter Jade had a snowball fight last year in Tallahassee, Florida, at FSU. They closed the school for a week as teachers didn’t know how to drive in a snowstorm. It typically snows once a decade in northern Florida. In my 25 years in South Florida, I once saw a droplet of ice form on the side of my windshield on a 29-degree morning. It melted with the touch of my finger.

I recently finished a 36-hour audiobook about the Oracle of Omaha (and the book only covered through 2008). The name of the book was Snowball because of the snowball effect Buffett uses to explain how money accumulates. He looks not at what money is worth today, but what it is worth tomorrow and decades from now.

If you invested $1,000 with Buffett in 1956 and later rolled it into Berkshire Hathaway in 1964, you’d be a billionaire today.

While I’ve written recently about market trends, Buffett made some major moves in the housing sector that are worth writing about now—especially in terms of what it means for pricing and for the value of your current home, or if you’re in the market to buy or sell. When Warren takes a position, the financial investing markets listen.

Here are 6 key points I think the Oracle is seeing—and that homeowners, sellers, and buyers should be aware of regarding values and timing for the residential housing sector…

Buffett’s Cash Strategy
Buffett is famous for hoarding cash. Berkshire Hathaway holds approximately $350 billion in cash or cash equivalents. They don’t make rash decisions and sometimes make no moves in a year—or even in a decade. So, most were shocked to see Buffett invest in not one, but two housing companies: Lennar and D.R. Horton. Both were secret, undisclosed investments. He likes to buy on the cheap, and he always makes sure that the company’s income statement and balance sheet are sound. He does not buy “hot” companies or new tech stocks. His theory is that most emerging tech is not only hard to understand but fails. He has famously pointed out how many new technologies like auto, airplane, and dot-com companies, when they first came out failed, making it wildly difficult to figure out which few would succeed. Instead, he looks for companies and industries that aren’t going anywhere.
The U.S. Housing Shortage
The United States is short about 4 million homes. Most of that deficit occurred because of the Big Short market from 2007–2014 when building screeched to a halt. Since then, the market saw recovery and balloon appreciation in 2025. But the last three years have been a correction. Across the country, prices have been stagnant. The medium home price in Palm Beach County was down 3% from a year ago. Couple that with 2.7% U.S. inflation (and increasing with tariffs and shortage of cheap labor), and home values have taken a double whammy from not keeping up with inflation. I wrote an article titled Inflation Boomerang back in May talking about this and why this time of year is the perfect time to be bullish on purchasing. My inner Oracle is proving correct.
Inflation Pressure
In essence, most industries are passing on costs to the consumer from tariffs. That’s why there was such a mad rush in March to buy cars—because people knew prices would rise once old inventories were gone. Now it’s coming to fruition. India has a 50% tariff. The de minimis exception to bring cheap goods in ($800 or less) ended this week. In addition, deportations are raising prices in other industries. My landscaper told me his average laborer is now making $280 a day, up from $180 a day. Housing, therefore, has been a giant silver lining for the consumer and has kept inflation more at bay.
Interest Rates
The executive branch is putting enormous pressure on the Fed to lower interest rates (and in turn, mortgage rates). Jerome Powell has resisted, but his term expires in 2026. With the executive branch gaining more control over Fed policy, interest rates—and thus mortgage rates—could follow. By January, we will be getting close to four years of a historic real estate activity slowdown. The amount of pent-up demand is starting to burst at the seams. Mortgage rates also don’t have to go down that much. We are now at 6.5%. The magic number where Buyers start to purchase in mass is 6%. The differential of homeowners who want to sell but are carrying a 3-4% rate is 2-3%. Meaning home owners who want to sell and buy are willing to make the move and lose a few percentage points as long as it isn’t more than a 3-3.5% differential. Plus, the number of people with a 3-4% loan is less than it was 4-5 years ago with many selling or paying some of it off. Life happens from job transfers to divorces to downsizing to up-sizing. As of August 2025, 53.4% of mortgage holders had a rate below 4%. That number was close to 70% in 2022. *Note, on Friday night (after I approved this article), a federal appeals court ruled that most of President Donald Trump’s global tariffs are illegal. If the Supreme Court confirms that, inflation should subside and along with it, the need for Fed intervention. Jerome Powell has said that interest rates would have come down in February if it were not for tariffs. Rates look to be coming down either with interference or without interference so an increase in demand should happen in any event.
Builders vs. Homeowners
Builders have it worse than homeowners when it comes to selling because they have to deal with the reality of rising prices for materials and labor. Home sellers, or resellers, don’t. If you are a buyer in this market and Warren Buffett is willing to invest in builders, then it’s as good a sign as you’re going to get that this is a great market to be purchasing in.
Perfect Timing for Buyers
My take is that the timing to purchase is close to perfect right now. Competition from snowbirds and renters is not here, nor are the purchasers who are sitting on the sidelines waiting for lower rates. When markets turn, dominoes of one property sale cause a multitude of other property purchases to follow, as many would-be sellers are also would-be buyers. And there is not as big a “Buffett” of supply of homes to choose from.

In summary:

Probable rate cuts
Homeowner depreciation
Pent-up demand
Housing supply shortage
Buffett’s investments as a double leading indicator

When markets turn hot and the snow melts, it can feel like you are still in a blizzard of competition to purchase. There are lots of signs for Buyers to feel confident about what is to come.