Mortgage rates hit 7.40%, a short seller hit Lennar, and Berkshire bought $192.6 million more

On Feaster Drive in Wesley Chapel, Florida, a new Lennar house went on sale in April for $490,990. By August the asking price had dropped to $420,490, according to Zillow listings reviewed by Hunterbrook. Then the house was sold, for $409,300, not to a family but to MRP Liberty, a subsidiary of Millrose Properties, the land company Lennar spun off last year. Today it is listed for rent at $2,825 a month.

That house, described in an investigation Hunterbrook published on October 2, sat at the center of the week's strangest collision in American business. On one side, a short seller (an investor who profits when a stock falls) says the country's second-largest homebuilder leaned on its own former subsidiary to hit a sales target. On the other, Berkshire Hathaway, which disclosed on Monday that it had bought another $192.6 million of Lennar stock. Around both, the cost of borrowing to buy a home climbed to 7.40%, its highest since November 2023, WRE News noted from Freddie Mac's survey.

Lennar has become a referendum on the housing market itself. Is this slump the bottom, as Berkshire seems to think, or a market so weak that builders are finding creative ways to keep their numbers up? The answer matters well beyond Wall Street, to anyone hoping to buy a first home.

A mortgage that costs $294 more a month

The 30-year fixed-rate mortgage averaged 7.40% on October 8, up from 7.28% a week earlier and 6.30% a year ago, Freddie Mac reported. On a $400,000 loan, that is a monthly payment of about $2,770 instead of $2,476 at last year's rate, WRE News calculated: $294 more every month, before taxes and insurance. The Mortgage Bankers Association reported a 4.2% weekly drop in mortgage applications.

Mortgage rates follow long-term government borrowing costs, and those hit a milestone this week. The 10-year Treasury yield reached nearly 5.37% on Wednesday, its highest level in 24 years, Yahoo Finance reported. The Federal Reserve raised its benchmark rate in September to a range of 3.75% to 4.00%, its first increase since July 2023. Catherine Koh, an economist at the National Association of Home Builders, also blamed oil, the deficit and “strong competition for capital from AI and hyperscaler investment.” Even the data-center boom, in other words, is bidding against homebuyers for money.

Builders feel it first. Lennar's chief executive, Stuart Miller, said in the company's third-quarter results on September 16 that the market “has deteriorated since our last earnings call.” Lennar's average home sold for $372,000 after about 12.0% in incentives, such as mortgage-rate buydowns. KB Home's quarterly report, filed with the SEC on Thursday, shows revenue down 20% from a year earlier, to $1.3 billion, and net income of $65.3 million, down from $109.8 million. Higher rates, KB Home's executive chairman, Jeffrey Mezger, said, “have caused many prospective buyers to be more cautious on purchasing a home.”

The short seller's case

Hunterbrook says it found more than 700 purchases of finished Lennar homes by Millrose across at least 51 counties in 15 states, worth an estimated $200 million or more in about a month. At least 356 came in the final week of Lennar's fiscal quarter, when Lennar beat the bottom of its delivery forecast by just 340 homes. Without those sales, Hunterbrook argues, Lennar would have missed that target too.

Millrose was built to hold land, not to be a landlord. Its first annual report said it would not “have any tenants or occupants” on its properties, Hunterbrook noted; in August it changed its agreements to let it buy Lennar's finished homes and rent them out. Hunterbrook estimates the homes return about 5% a year after expenses, while Millrose's latest bonds pay 6.5% to 6.75%. It also points out that Miller holds 43% of Millrose's votes.

Two caveats matter. Hunterbrook's investment arm is short both Lennar and Millrose, as its article discloses, so it profits if their shares fall. And these are allegations built on property records, not findings by any regulator. Lennar could not be reached for comment and Millrose did not respond to Hunterbrook's questions, the outlet said.

Investors did not wait. On Monday, October 5, Lennar's shares traded as low as $74.35, down from $79.81 at Friday's close, according to Weiss Ratings, which put the fall down to the Millrose report. That left them about 44.4% below their peak of last December. Some analysts were already worried about the Millrose arrangement. “The impact from Millrose is worse than we previously modeled, and worse than I think management expected,” Jade Rahmani of KBW said, according to National Mortgage News.

Why Berkshire keeps buying

Berkshire's Form 4, filed on Monday, shows it bought about 2.4 million shares on October 1 and 2, before Monday's drop. It was the largest open-market insider purchase reported in the U.S. this week, and on its own made up 42% of the $453.7 million that insiders bought across the market. On Wednesday, a Schedule 13G amendment showed Berkshire and Warren Buffett as holders of 12.5% of Lennar's Class A shares as of September 30. Through Friday, EDGAR showed no newer Berkshire purchase.

The stake is worth about $2.2 billion, enough to put Berkshire in position to overtake Vanguard as Lennar's largest shareholder, National Mortgage News reported. It is part of a larger housing bet under Buffett's successor as chief executive, Greg Abel: in July Berkshire bought the builder Taylor Morrison, and it already owns Clayton Homes. “We don't envision a quick recovery there,” Abel told CNBC in September. “But we do see it as an industry that we definitely want to be invested in, and we're invested for the long-term.”

Hunterbrook pointed out that Berkshire stepped up its buying the day after Lennar's September 16 results, spending nearly $350 million over a few days, and asked whether Berkshire knew about the Millrose sales. Berkshire did not reply to Hunterbrook. Drew Reading of Bloomberg Intelligence read the purchases more simply: “It's really just a vote of confidence in the long-term outlook for housing and a bet on Lennar having torque to an eventual market rebound.” Big holders buy for many reasons, and a filing shows what was bought, not why. Berkshire's influence also has limits: Miller controls about 42% of Lennar's votes through its Class B shares.

What Lennar's own filings show

Lennar's annual reports tell the story of a builder giving up profit to keep selling. Net income was $2.1 billion in fiscal 2025, less than half the $4.6 billion it made in 2022. In the latest quarter it earned $284 million, down from $591 million a year earlier. Profits at D.R. Horton and PulteGroup have fallen less. Other builders have slowed construction to match weaker demand, while Lennar has kept building and let its margins fall, National Mortgage News reported. Miller calls it a strategy to “meet demand at affordability and build supply rather than wait the market out.”

Lennar also moved almost all its land off its books, keeping less than 2.5% of it, compared with 22% at D.R. Horton, and agreed to take lots from Millrose on a fixed schedule, National Mortgage News reported. That protects Lennar if land values crash. It also means Lennar must keep building, and selling, whether buyers show up or not. “It's why Lennar has decoupled from its peers,” said Buck Horne, an analyst at Raymond James.

Our read: two bets on the same houses

Berkshire and Hunterbrook are not really arguing about the same thing. Hunterbrook's case is about the next few quarters: whether Lennar's sales are as strong as they look, and whether a company tied to it should be buying its homes at a loss. Berkshire's is about the next decade: that America does not have enough houses, and that the biggest, lowest-cost builder will win when rates come down. Both can be right.

What it means for buyers: with mortgage rates near their highest in almost three years, we expect builders to keep paying for incentives and rate buydowns rather than cut list prices outright, and more brand-new houses to end up as rentals, whether owned by Millrose, by investors or by the builders' partners. For families, that means new subdivisions with more renters next door and fewer starter homes for sale. For Lennar, the test comes in its fourth-quarter report, for which it has forecast 19,500 to 20,500 new orders. A clear miss, or a disclosure that more of its deliveries went to Millrose, would strengthen the short seller's case. A 10-year Treasury yield falling well back from this week's peak would do more for Berkshire's bet than anything Lennar can say.

For now, the most telling price in American housing may not be 7.40% or Lennar's share price. It is $2,825 a month: the rent on a brand-new house that its builder could not sell to a family.

Also in the filings, October 5–9, 2026

• Insider buying $453.7M — 104 insiders at 72 companies
• Insider selling $2.8B — 521 insiders at 316 companies
• Covered companies reporting 16 — ABBV, APA, APO, AVNT, COST, CTAS
• Theme: Recession +63% — mentions per 8-K vs the usual week
• Largest insider purchaseBerkshire Hathaway Inc bought $192.6M of Lennar Corp /New/ (LEN)
• Largest insider saleGIC Private Ltd sold $721.6M of Medline Inc. (MDLN)
• Results filedCostco, Cintas, Levi Strauss, Constellation Brands, KB Home, PepsiCo, Delta Air Lines, Micron Technology
• Biggest jump in attentionDell Technologies: Wikipedia views up 570% on the usual week

Sources

1. Mortgage Rates (Primary Mortgage Market Survey) · Freddie Mac
2. Mortgage Rates Reach 7.40%, Highest Since November 2023 · WRE News
3. Markets News, Oct. 9, 2026: Stocks Rise as Oil Prices, Treasury Yields Stabilize; Major Indexes Post Weekly Gains · Yahoo Finance
4. Fed hikes, hints at more: 7 takeaways from the September FOMC · investingLive
5. Treasury yields jump, mortgage rates follow · Builder.Media
6. EXCLUSIVE: Lennar’s Big New Customer Is Its Own Spinoff, Millrose · Hunterbrook
7. Lennar Corporation (LEN) Down 6.8% · Weiss Ratings
8. Berkshire's bet on US housing grows with Lennar buying binge · National Mortgage News
9. Lennar Reports Third Quarter 2026 Results · Lennar (SEC filing)
10. KB Home Reports 2026 Third Quarter Results · KB Home (SEC filing)
11. Schedule 13G/A: Lennar Corporation · Berkshire Hathaway (SEC filing)