Is Buffett also betting on the Federal Reserve cutting interest rates?

Warren Buffet is sending a clear signal to the market that his company, Berkshire Hathaway, is investing funds into the highly interest rate sensitive U.S. residential construction industry. This move indicates that the legendary investor may be betting on the expectation of lower future interest rates, believing that the housing market is about to see a tailwind. According to Berkshire Hathaway's latest 13F filing, the company has taken new positions in one of the largest residential builders in the U.S., D.R. Horton, in the second quarter. At the same time, the filing shows that Berkshire Hathaway also increased its holdings in another residential builder, Lennar. In the current market environment, Buffet's actions are significant. As one of the most followed investors in the world, his moves are often seen as a "barometer" of market trends. Increasing positions in residential construction stocks undoubtedly adds important weight to the bullish prospects of this sector, strengthening the market's expectations that the fundamentals of the housing industry may be improving. Buffett's actions are not isolated. In fact, some companies in the housing and its related industries have shown signs of strength. From technical patterns to fund flows, more and more signals indicate that investors are reassessing this industry, which has long been suppressed by high interest rates, and are seeking new investment opportunities. Buffett's new target: interest rate sensitive housing industry Berkshire's latest portfolio report is the most direct evidence of its optimism about the housing market. The filing shows that the company purchased shares of D.R. Horton in the second quarter. This move, along with the increased holding of Lennar, highlights its overall confidence in the industry. The price performance of D.R. Horton also supports this bullish view. Year-to-date, the company's stock price has risen by 19%, outperforming Toll Brothers' 4% increase, and surpassing Lennar's 3% decline during the same period. From a technical standpoint, D.R. Horton's stock price recently broke through the bullish "inverse head and shoulders" neckline at $150, which is a key technical signal. Analysts believe that the stock has the potential to challenge the $200 mark by the end of the year. Other residential builders in the market have also shown strong momentum. Taylor Morrison Home is one of them, demonstrating remarkable relative strength. Among major residential builders, its stock is the only one that has retreated less than 10% from its 52-week high. Technical charts show that Taylor Morrison Home's stock price surged 5% on August 13th, decisively breaking through the "cup and handle" buy point around $68.33. The stock has recorded gains in 8 out of the past 10 weeks, indicating sustained buying interest. Analysts suggest that the stock may reach $75 by the end of the fourth quarter and could potentially reach $100 by the beginning of 2026. "Potential stocks" in the industry chain Investors can also look upstream in the housing industry chain. Masco, as a supplier of building products and equipment, is considered a "potential stock" worth watching. Although its stock price performance year-to-date has been flat, rising by only 1%, it has surged by 13% in the past month. Masco's daily chart shows that its stock price recently broke through the bullish "ascending triangle" pattern near $70. Especially on August 12th to 13th, the stock rose by a total of 8%. Technical analysis suggests that after regaining upward momentum, the stock could target $85 by the beginning of the fourth quarter. As a giant in the global paint industry, Sherwin-Williams is also poised to benefit significantly from any rebound in the housing market. The company's stock price has risen by 7% year-to-date, with a significant technical breakthrough on its weekly chart. The chart shows that Sherwin-Williams' stock price has broken through a two and a half year "cup with handle" base formation, with a breakout point near $350. There is a saying in technical analysis: "the longer the base, the higher the rise." Analysts expect that with the confirmation of the technical pattern, the next important level to watch for the stock is the $400 mark, and it could reach that level by the end of the year.