Buffett's housing bet pays off

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NEW YORK, Aug. 4 (UPI) -- The Sage of Omaha, billionaire investor Warren Buffett, has hit the mark on the housing market, data and company reports indicate.

In July, Buffett said a recovery in the housing market was a critical part of a broader economic recovery. He also said, he had noticed the market was gathering some momentum.

He then made a sizable bet in the housing market with a bid on ResCap loans, MarketWatch reported Saturday.

Buffett's investment firm Berkshire Hathaway Inc., then announced "revenues from home sales increased $40 million -- 11 percent -- in the second quarter and $103 million in the first six months," referring to the country's largest producer and financier of manufactured homes, Clayton Homes, which Berkshire Hathaway owns.

In addition, a closely-watched index on home prices, the S&P/Case-Shiller 20-city index rose 2.2 percent in May.

The index also rose 1.3 percent in April, which was the first climb in seven months.

"We would like to think that housing is finding its equilibrium, that it is searching for a bottom and establishing a base," said investment manager Steven Jones at First Washington.

Berkshire Hathaway's second quarter earnings far exceeded expectations, coming in at $3.72 billion or $2.252 per Class A Share, a solid jump from the $1,640 Class A share value at the end of the second quarter of 2011.