While he has made thousands during his accomplished career, Warren Buffet, the CEO of Berkshire Hathaway, says his rather modest home was the third-best investment he ever made.
The house, which Buffet purchased more than 50 years ago for $31,500, is now valued at more than $660,000, which he calls proof that homeownership makes financial sense. His only better investments were two wedding rings.
Buffet is also somewhat optimistic about the future of the housing and mortgage markets. He said he expects to see signs of recovery within a year, as long as mortgage lenders return to common-sense lending.
“A house can be a nightmare if the buyer’s eyes are bigger than his wallet and if a lender – often protected by a government guarantee – facilitates his fantasy,” Buffett said. Adding that not everyone can actually afford “the house of their dreams.”
The government has taken over a large share of the mortgage market over the past few years. The Federal Housing Administration alone accounted for more than 20 percent of mortgage loans in 2009.
We’re proud to be in the business of helping Americans realize the dream of homeownership. After 14 years of business, we are now one of the top lenders in the country. A lot of our growth has come in the past few years, some of the most troublesome ever in the mortgage industry. We attribute that to the common sense lending tactics Mr. Buffet remarked on.