Fortune published an article on August 15, 2023 detailing why Warren Buffet just made a large investment in the U.S. housing market. In particular, why he is betting on single-family homebuilders to generate robust profits in the coming years.
Berkshire Hathaway recently purchased shares in D.R. Horton (NYSE: DHI), Lennar (NYSE: LEN), and NVR (NYSE: NVR). Those shares are valued at over $800 million.
U.S. homebuilders have a bright future.
Homebuilder stocks have been performing well this year with D.R. Horton up 38.0%, Lennar up 36.2%, and NVR up 33.5%. This far outpaces the S&P 500 index which is up 16.3% this year.
Homebuilders have benefited from scarcity of inventory in the housing market. The scarcity of existing inventory has driven homebuyers to consider newly constructed homes, boosting sales figures and profits for homebuilders.
According to the Federal Reserve Economic Data, new-home sales grew 23.8% year over year in June 2023.
Many experts believe this shortage of single-family housing could last for years, primarily driven by homeowners with mortgage rates under 4% on their current property who are hesitant to sell and give up their low rates.
D.R. Horton CEO David Auld told Fortune back in June, “It is hard to pinpoint exactly how underbuilt the country is, but I firmly believe we are still in an extremely undersupplied housing market, for both new and existing homes, likely for years to come due to development and construction capacity constraints in the industry,”
How can EB-5 investors follow Warren Buffett’s investment strategy?
EB5AN’s Twin Lakes Georgia Rural TEA project is an investment in a single-family home active adult community consisting of 1,300 for-sale units nearby Atlanta, Georgia.
Twin Lakes is being developed by The Kolter Group (Kolter), one of the top 25 largest private real estate developers in the United States. In 2022, Kolter led all other homebuilders in active adult single-family home sales in the Atlanta metro area with a 17% market share – Lennar was second with a 15.8% share and D.R. Horton was seventh with a 3.0% market share.
Twin Lakes Georgia is already well under construction and profitable.
As of September 2023, the Twin Lakes Georgia project has already fully constructed and delivered 420 homes to buyers. With 563 homes sold in total, they have a pre-sold pipeline of 143 homes that will be built and delivered homebuyers over the next year. Sales in the last few months have outpaced previous years and show no sign of slowing down.
Active adult single-family home developments are ideal investments in the current real estate market
Twin Lakes is an age-restricted community for adults aged 55 and over. This age group tends to have significant financial assets saved over the course of their careers in addition to equity in their current homes.
Many seniors are looking to downsize and move south into warmer climates, and this often means selling their higher-value home to buy a less expensive one. As a result, they are able to make larger down payments, or pay entirely with cash.
With mortgage rates approaching 8%, the target homebuyer demographic should be a primary consideration when investing in a single-family home real estate development due to the impact these rates have on affordability. That’s why many experienced investors agree Twin Lake Georgia is an ideal EB-5 investment in the current real estate market.
Learn More About Twin Lakes
To learn more about the EB-5 immigration process and how Twin Lakes can offer your family a safe path to U.S. immigration, schedule a free consultation with EB5AN.
