Berkshire Hathaway’s $1 billion homebuilding investment indicates Warren Buffett’s confidence in a future U.S. housing market rebound.

The investment comes as UnitedHealth faces soaring medical costs, federal investigations, the fallout of the killing of a top executive and a cyberattack last year.

Buffett owned UnitedHealth shares before selling his stake in 2010, though his Berkshire Hathaway recently acquired shares.

Warren Buffett's modus operandi is to wait for price dislocations to present themselves. In a historically pricey stock market, locating value has been virtually impossible. Yet, with UnitedHealth Group stock losing more than half its value since the midpoint of April, a rare price dislocation has emerged.

Buffett's $1.57B bet on UNH sparks a 12% surge, lifting peers despite sector headwinds and recent struggles at the insurer.

On Friday, high-profile investors Michael Burry and Warren Buffett took positions in UnitedHealth Group Inc. (NYSE:UNH). Warren Buffett's fund bought little more than 5 million shares, and Burry disclosed in 13F filings that he purchased call contracts against 350,

UnitedHealth was a star stock late last week, when it was revealed that Warren Buffett's Berkshire Hathaway had taken a $1.6 billion stake in the company's equity. On Monday, lingering positive sentiment on UnitedHealth was boosted by that price target bump.

Warren Buffett's mystery stock purchase has sparked speculation and a frenzy. The only certain clue is that it's not a bank, insurer, or consumer products company.