Warren Buffett, longtime CEO of Berkshire Hathaway, transformed a struggling textile maker into a multinational holding company with a valuation of roughly $800 billion. In part, Buffett accomplished this unparalleled success through his investing prowess: He and his investment managers buy individual stocks with premiums from its insurance business, also known as the float. 

While Buffett doesn't comment on all of Berkshire's investments, the company must list its holdings 45 days after each quarter. In Berkshire's latest filing, the company showed investments totaling $814 million in three homebuilders.

With mortgage rates at a 20-year high, some might question the strategy, but here are two possible reasons: Experts estimate the U.S. has underbuilt by 6.5 million single-family houses since the Great Recession, and homebuilders can offer lower introductory mortgage rates than home lenders. 

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Source Fool.com