Buffett said the recovery hinges on durable, common sense underwriting based on affordability for mortgage borrowers.

Berkshire Hathaway stock was up more than 2% Monday following the letter's release over the weekend that also indicated Buffett's readiness to spend $38 billion the company has in reserves. More specifically on the housing front, Buffett said mortgages written by his Clayton Homes company, a producer and financer of manufactured homes, were provided to stronger and savvier borrowers than those who made up the bulk of the housing bubble.

"If home buyers throughout the country had behaved like our buyers, America would not have had the crisis that it did," said Buffett, chairman of Berkshire Hathaway. "Our approach was simply to get a meaningful down payment and gear fixed monthly payments to a sensible percentage of income. This policy kept Clayton solvent and also kept buyers in their homes."

In 2010, Buffett reported 1.72% in losses as a percentage of originated mortgages. Clayton produced 23,243 homes in 2010 for a 47% market share of 50,000 for the entire industry. That figure has plummeted from the more than 372,000 homes produced during the peak in 1998.

Clayton currently owns more than 200,000 mortgages with an average FICO score of 648. Buffett said these homeowners borrowed sensible amounts in relation to their income, and Clayton kept the loans on their accounts instead of selling them through securities on the secondary market.

"If we were stupid in our lending, we were going to pay the price," Buffett wrote. "That concentrates the mind."

He added that as the housing market pushes toward a recovery, home ownership can still make sense for many Americans with lower prices and interest rates. Future housing policy, he said, should be sculpted from lessons learned during the downturn.

"But 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. "Our country's social goal should not be to put families into the house of their dreams, but rather to put them into a house they can afford."

The population of Malibu went up .56 percent from 2000 to 2010, according to figures from the U.S. Census Bureau’s 2010 count.

In 2000, the census listed Malibu with a population of 12,575. By 2010, that amount climbed only slightly to 12,645. Of these people, 2,366 are under age 18 (down from 2,467 in 2000).

According to the bureau’s 2010 statistics, of the residents who identified themselves as being of one race,   11,565 (91.5 percent) are white, 328 are Asian (2.6 percent), 148 are black or African-American (1.2 percent), 20 are American Indian/Alaska native (.2 percent), 15 are Native Hawaiian/other Pacific Islander (.1 percent) and 182 (1.4 percent) people listed themselves as "some other race."

The number of residents who identified themselves as being of two or more races was 387 (3.1 percent).

The number of residents who identified themselves as Hispanic or Latino of any race was 769 (6.1 percent).

The census figures indicated that there are 6,864 housing units in Malibu, 5,267 (76.7 percent) of which are occupied and 1,597 of which are vacant. The 2000 census did not include housing figures.

In December, the Census Bureau released state population figures indicating that the population of California grew from 33.9 million residents in 2000 to 37.3 million in 2010. California’s 10 percent growth rate makes it the 20th fastest-growing state in the country, but it remains the most populous one.

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