iShares Residential and Multisector Real Estate ETF (ARCA: REZ)

最新ニュース iShares Residential and Multisector Real Estate ETF (ARCA:REZ)

iShares Residential and Multisector Real Estate ETF

iShares Trust iShares Residential Real Estate ETF

iShares Residential Real Estate Capped ETF

Real Estate

The Fund seeks to track the investment results of the FTSE Nareit All Residential Capped Index; the Underlying Index, which measures the performance of the residential apartments, manufactured homes, healthcare and self-storage real estate sectors of the U.S. equity market, as defined by FTSE International Limited; the Index Provider or FTSE.

Welltower

Public Storage

Extra Space Storage, Inc., Reit

Avalonbay Communities Inc.

Equity Residential Eqr

Ventas Canada Inc.

Alexandria Real Estate Equities Inc.

Invitation Homes Inc. Real Estate Investment Trust

Essex Property Trust Inc.

Mid-America Apartment Communities Inc - Common

Renzo - United States Dollar

Resideo Technologies Inc

Street Capital Inc

GLOBAL BATTERY METALS LTD by Global Battery Metals Ltd.

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The U.S. mortgage market hit a speed bump last week as rising interest rates pushed application activity lower, breaking a <a href="https://www.benzinga.com/news/econ-s#:~:text=Econ%20%23s%20Recent%20News&amp;text=Markets%20are%20fully%20priced%20in,impact%20monetary%20policy%20for%202025.&amp;text=US%20private%20sector%20ended%202024,Manufacturing%20sector%20still%20in%20contraction.">five-week streak of growth.</a>
According to the Mortgage Bankers Association (MBA), total mortgage applications decreased 0.7% for the week ending Dec. 13, 2024, signaling persistent challenges for buyers and homeowners navigating high-rate environments.
The average interest rate for 30-year fixed-rate mortgages on conforming loan balances — up to $766,550 — rose from 6.67% to 6.75%, snapping three consecutive weeks of marginal declines.
"Mortgage rates increased last week, leading to overall mortgage application activity decreasing for the first time in five weeks,&#8221; said Joel Kan, MBA's vice president and deputy chief economist.
&#8220;Buyers remained active in the purchase market, helped by gradually improving inventory conditions and a more positive outlook on the economy and job market,&#8221; he added.
The Mortgage Refinance Index fell 3% from the previous week, but still remained 41% higher than the same period in 2023. VA refinance applications plunged 17%, offsetting gains seen in prior weeks.
<figure class="wp-block-table is-style-stripes"> 
<table>
<thead>
<tr>
<th>Loan Type</th>
<th>Avg. Rate (%)</th>
<th>Change (bps)</th>
<th>Points</th>
</tr>
</thead>
<tbody>
<tr>
<td>30-Year Fixed (Conforming)</td>
<td>6.75%</td>
<td>+8</td>
<td>0.66</td>
</tr>
<tr>
<td>30-Year Fixed (Jumbo)</td>
<td>6.86%</td>
<td>+7</td>
<td>0.61</td>
</tr>
<tr>
<td>30-Year Fixed (FHA)</td>
<td>6.49%</td>
<td>+2</td>
<td>0.79</td>
</tr>
<tr>
<td>15-Year Fixed</td>
<td>6.15%</td>
<td>+3</td>
<td>0.71</td>
</tr>
<tr>
<td>5/1 Adjustable-Rate Mortgage</td>
<td>6.03%</td>
<td>+22</td>
<td>0.48</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Source: MBA</figcaption></figure>
<h3 class="wp-block-heading">Housing Affordability: Renting vs. Owning</h3>
Mortgage rates remain near 7%, while home prices have risen in all 97 major U.S. cities. 
Bank of America examined the rent-versus-buy dilemma in 97 U.S. cities in a note to clients on Wednesday.
The result? In places like San Francisco, Los Angeles, and San Jose, mortgage payments now account for a staggering 60-70% of median family income, making renting the clear budget-friendly option, according to the investment bank. 
&#8220;Regionally, it is still cheaper to rent than purchase for 82 out of 97 major cities in the US,&#8221; analyst Jeseo Park wrote. 
New Orleans, Pittsburgh, and El Paso are among the cities where it&#8217;s cheaper to own than rent.
"The housing market is still stuck between high mortgage rates and low inventories," said Park. 
"We've seen some relief with the Federal Reserve starting to ease monetary policy, but rates are unlikely to fall dramatically in the near term. Buyers should expect only mild improvements next year," she added. 
With the mortgage spread hovering around 2-2.5 percentage points and Bank of America analysts forecasting a 10-year yield of 4.25% in 2025, mortgage rates are expected to stay around 6-6.5% next year. 
&#8220;Given that many homeowners locked in low rates during Covid, a mortgage rate above 6% would still be too high to promote significant activity,&#8221; Park stated. 
<h2 class="wp-block-heading">Market Reactions</h2>
The iShares Residential and Multisector Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REZ#NYSE">REZ</a>) edged up 0.1% on Wednesday, following twelve losses in the past thirteen sessions.
The VanEck Mortgage REIT Income ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MORT#NYSE">MORT</a>) climbed 0.5%, recovering from a 1.3% decline on Tuesday.
Stocks within the industry saw minimal movement as markets adopted a cautious, wait-and-see stance ahead of the upcoming Federal Reserve meeting.
Hannon Armstrong Sustainable Infrastructure Capital Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HASI#NYSE">HASI</a>) and New York Mortgage Trust, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NYMT#NYSE">NYMT</a>) were among the top gainers in the MORT ETF, rising 1.8% and 1.2%, respectively. Meanwhile, Ares Commercial Real Estate Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ACRE#NYSE">ACRE</a>) was among the laggards, slipping 0.9%.
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Macro Economic Events

Sector ETFs

Econ #s

Economics

Federal Reserve

ETFs

ACRE

Hannon Armstrong Sustainable Infrastructure Capital

HASI

MORT

NYMT

iShares FTSE NAREIT Residential PLUS Capped Index Fund

Mortgage Applications Dip As Rates Climb: 'It Is Still Cheaper To Rent Than Purchase For 82 Out Of 97 Major Cities'

A sharp reversal in mortgage rates has taken U.S. homebuyers by surprise, leading to the largest drop in weekly <a href="https://www.benzinga.com/money/mortgages">mortgage applications since mid-August. </a>
The sudden uptick in rates adds pressure to an already challenging housing market, where affordability and supply are becoming increasingly elusive for prospective buyers.
<h3 class="wp-block-heading">Mortgage Rates Climb To Highest Levels Since August</h3>
The average interest rate for a 30-year fixed-rate mortgage on conforming loans (under $766,550) jumped 22 basis points to 6.36% in the week ending Oct. 4, according to the latest Mortgage Bankers Association (MBA) report.
This marks the highest level since August and represents the largest weekly jump in 30-year rates since April 2024.
For context, just a week earlier, the average rate stood at 6.14%, a level that mirrored the lows seen back in September 2022. This sudden surge in borrowing costs has cooled demand as mortgage rates climbed in tandem with Treasury yields.
In the same week, rates for jumbo loans (those exceeding $766,550) also rose, hitting 6.64%, a 14-basis-point increase from the previous week.
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="585" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/09081807/image-62-1024x585.png" alt="" class="wp-image-587532" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/09081807/image-62-1024x585.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/09081807/image-62-300x171.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/09081807/image-62-768x439.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/09081807/image-62-1536x878.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/09081807/image-62.png 1890w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<h3 class="wp-block-heading">Mortgage Applications Drop Across The Board</h3>
As a result of the spike in mortgage rates, the demand for home loans sharply declined. 
Overall mortgage applications dropped 5.1% in the first week of October, extending the previous week&#8217;s 1.3% decline. This back-to-back pullback trimmed a significant portion of the nearly 30% increase in mortgage demand seen in September.
Applications for home refinancing, which are more sensitive to short-term rate changes, plummeted by 9% from the previous week.
<h3 class="wp-block-heading">Jobs Report Sparks Rethink On Interest Rates</h3>
The primary driver of the recent rate spike was the unexpectedly robust September jobs report, which exceeded market expectations and pushed Treasury yields higher.
Last month, the U.S. economy added 254,000 nonfarm payrolls, well above the forecasted 140,000. Furthermore, the unemployment rate dipped to 4.1%, while wages grew faster than anticipated, signaling a labor market that remains hotter than expected.
"Across every dimension, the September employment report showed a job market that was stronger than expected," said Mike Fratantoni, chief economist at the MBA. 
He added that while the data could support a &#8220;soft landing&#8221; for the economy, it also raises concerns about inflation&#8217;s persistence. The strong labor market suggests the Federal Reserve may not need to cut rates as quickly as many had hoped.
<h3 class="wp-block-heading">Market Reactions: Treasury Yields Spike, Mortgage-Linked Stocks Fall</h3>
Following the strong jobs data, traders revised their expectations for Federal Reserve policy. 
Before the report, many had anticipated a potential back-to-back 50-basis-point rate cut in November. However, the latest labor developments have completely wiped out those expectations.
Investors are currently assigning an 87% chance of a 25-basis-point cut, while the remaining odds are for a no-rate cut scenario, as per the CME FedWatch tool.
The 30-year Treasury yield, which often serves as a barometer for mortgage rates, jumped by 15 basis points last week to 4.30%. Meanwhile, the 10-year yield also breached the 4% threshold, something investors hardly expected just weeks after a sizable Fed rate cut.
Mortgage-linked stocks took a hit, pressured by rising bond yields. The VanEck Mortgage REIT Income ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MORT#NYSE">MORT</a>) dropped nearly 5% last week and is down an additional 0.8% this week. Meanwhile, the iShares Residential and Multisector Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REZ#NYSE">REZ</a>) slid almost 3% last week and has fallen another 1% so far this week.
<h3 class="wp-block-heading">Mortgage Rates Outlook: What's Next?</h3>
Looking ahead, the MBA forecasts that longer-term rates, including mortgage rates, will stay within a relatively narrow range over the next year. 
Though this recent spike has brought rates to the higher end of that range, the MBA predicts mortgage rates will remain close to 6% for much of the next 12 months.
However, any future surprises in inflation or economic data could disrupt this outlook. If Treasury yields continue to rise, mortgage rates may follow suit, further straining affordability for homebuyers and applying more downward pressure on housing demand.
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Image created using artificial intelligence via Midjourney.

Mortgage Rates Make Dramatic U-Turn, Freezing Homebuyers: Applications Fall 5% As Markets Rethink Fed Policy

American homeowners and prospective buyers had been biding their time, waiting for a decisive move from the Federal Reserve to <a href="https://www.benzinga.com/money/mortgages">reignite the mortgage market. </a>
That moment came on Sept. 18, when the Fed&#8217;s large and unexpected 50-basis-point rate cut—bringing the target range to 4.75%-5%—opened the floodgates for mortgage refinancing and home purchases.
According to the Mortgage Bankers Association (MBA), applications jumped 11% in the week ending Sept. 20, building on the previous week's 14.2% surge and pushing activity to its highest level since June 2022.
The spike in demand has closely followed the broader trend in benchmark mortgage rates. The average rate on a 30-year fixed — often the go-to option for American homebuyers — fell to a <a href="https://www.benzinga.com/topic/interest-rates">two-year low of 6.13%.</a>
<h3 class="wp-block-heading">Refinancing Boom: Time To Seize Mortgage Moment</h3>
The surge of activity was particularly elevated in refinancing, which had been dormant amid years of high borrowing costs. 
Refinancing applications soared by 20% last week, as homeowners moved quickly to lock in lower rates and cut their monthly mortgage payments. 
The refinance application index has rallied to levels last seen in late March 2022. Lower mortgage rates can directly translate into lower monthly payments for millions of Americans, making refinancing an appealing option. For example, a homeowner with a $300,000 loan at a 7% rate could save around $300 per month if they refinance into a 6% loan. 
Historically, periods of falling interest rates have coincided with stronger home-buying activity, and this time appears to be no different.
"Mortgage rates likely had this cut — and this expected rate path — priced in, and lower mortgage rates, now close to 6%, have resulted in much more refinance and some additional purchase activity in recent weeks," said Mike Fratantoni, MBA&#8217;s senior vice president and chief economist.
&#8220;If mortgage rates remain near these levels, it will support a stronger-than-typical fall housing market, and next spring could see a real rebound in activity," he added. 
The Vanguard Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VNQ#NYSE">VNQ</a>), which tracks the broader real estate sector, was flat in premarket trading following the news. Similarly, the iShares Residential and Multisector Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REZ#NYSE">REZ</a>), which has more direct exposure to the housing market, held steady. 
Meanwhile, the VanEck Mortgage REIT Income ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MORT#NYSE">MORT</a>) saw a slight uptick of 0.5%. 
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Analyst Color

REIT

Mortgage Demand Soars As Fed Interest Rate Cut Fuels Housing Market Revival: 'Next Spring Could See A Real Rebound'

All the stars seem to be aligned for real estate stocks, setting the stage for a potential structural rebound after <a href="https://www.benzinga.com/topic/real-estate-investing">years of lackluster performance</a>.
As the economy shows robust growth and inflation continues its downward trend, investors are increasingly optimistic about the Federal Reserve&#8217;s anticipated interest rate cuts, sparking renewed enthusiasm for real estate investments.
Investors have channeled significant amount of capital into real estate investment trusts (REITs) in August, speculating on the much-anticipated decline borrowing costs as a factor to revitalize the sector. 
Bank of America reports that the bank&#8217;s private clients flocked to REIT exchange-traded funds (ETFs) in August, driving the highest weekly inflow since March 2024, with $0.8 billion pouring into these funds, and the longest four-week streak since March 2022.
The top five real estate ETFs have collectively attracted over $2.4 billion last month alone, according to data from TradingView. This amount represents a staggering amount that represents two-thirds of their total inflows for the past year. 
<h3 class="wp-block-heading">Top 5 REIT ETFs Attracted Over $2.4 Billion in August</h3>
Here&#8217;s a breakdown of the leading ETFs by inflows:
<figure class="wp-block-table is-style-stripes"> 
<table>
<thead>
<tr>
<th>Fund Name</th>
<th>1-Month Inflows (USD)</th>
<th>1-Year Inflows (USD)</th>
</tr>
</thead>
<tbody>
<tr>
<td>iShares U.S. Real Estate ETF</td>
<td>$853.814 million</td>
<td>$1.328 billion</td>
</tr>
<tr>
<td>Vanguard Real Estate ETF</td>
<td>$650.912 million</td>
<td>$42.887 million</td>
</tr>
<tr>
<td>Real Estate Select Sector SPDR Fund</td>
<td>$600.587 million</td>
<td>$2.105 billion</td>
</tr>
<tr>
<td>SPDR DJ Wilshire REIT ETF</td>
<td>$168.303 million</td>
<td>$129.095 million</td>
</tr>
<tr>
<td>iShares Residential and Multisector REIT ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REZ#NYSE">REZ</a>)</td>
<td>$136.758 million</td>
<td>$92.397 million</td>
</tr>
</tbody>
</table>
</figure>
In terms of market performance, the Real Estate Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLRE#NYSE">XLRE</a>) surged over 4% in August, making it the second-best performing sector behind consumer staples. 
Year-to-date, the real estate sector has lagged behind the broader market, trailing the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) by 10 percentage points. 
Notably, in the past two months—coinciding with increased expectations for rate cuts in September—real estate stocks have posted a remarkable 14% gain, significantly outpacing the S&amp;P 500&#8217;s modest 3% increase during the same period.
<h3 class="wp-block-heading">Chart: Real Estate Stocks Outperformed Broader Market In Recent Months</h3>
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="463" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/09/02093607/image-1024x463.png" alt="" class="wp-image-525519" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/09/02093607/image-1024x463.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/09/02093607/image-300x136.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/09/02093607/image-768x348.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/09/02093607/image-1536x695.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/09/02093607/image.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Earnings for real estate companies are also beginning to exceed expectations. &#8220;At the sector level, the Health Care (86%), Real Estate (84%), and Industrials (82%) sectors had the highest percentages of companies reporting earnings above estimates,&#8221; highlighted John Butters, senior earnings analyst at FactSet.
On the data front, there's more good news for U.S. homebuyers as mortgage rates continue their downward trajectory. For the week ending August 23, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances (up to $766,550) dipped to 6.44% from 6.50%, marking the lowest level since April 2023 and the fourth <a href="https://www.benzinga.com/markets/24/08/40611223/mortgage-rates-hit-17-month-lows-but-homebuyers-are-staying-patient-as-applications-stall">consecutive week of declines</a>.
Recent economic data has also dispelled fears of an imminent recession. The<a href="https://www.benzinga.com/government/24/08/40624663/us-economy-expands-by-3-in-q2-surpasses-earlier-estimates-jobless-claims-little-moved-last-week"> U.S. economy grew at an annualized rate of 3% in the second quarter,</a> surpassing earlier estimates of 2.8% and more than doubling the 1.4% growth recorded in the first quarter. This marks the eighth consecutive quarter of expansion, driven by a significant upward revision in consumer spending.
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Equities

XLRE

Real Estate ETFs See Longest Inflow Streak Since March 2022 As Investors Jump On The Rate Cut Bandwagon

Good news is on the horizon for U.S. homebuyers as mortgage rates <a href="https://www.benzinga.com/money/mortgages">continue their downward trend.</a>
 In the week ending Aug. 23, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances (up to $766,550) dipped from 6.50% to 6.44%. This marks the lowest level since April 2023 and the fourth consecutive week of rate declines.
Yields on a 30-year Treasury bond – a key benchmark for mortgage costs – fell by 5 basis points to 4.09% in the week ending Aug. 23. 
<h3 class="wp-block-heading">Chart: 30-Year Mortgage Rates Drop To Levels Unseen Since April 2023</h3>
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="508" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/28083359/image-279-1024x508.png" alt="" class="wp-image-518253" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/28083359/image-279-1024x508.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/28083359/image-279-300x149.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/28083359/image-279-768x381.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/28083359/image-279-1536x762.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/28083359/image-279.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Despite the easing rates, homebuyers are still taking a wait-and-see approach. Mortgage applications saw a modest increase of 0.5% from the previous week, according to the Mortgage Bankers Association's (MBA) Weekly Applications Survey. 
Refinancing activity, which is more sensitive to changes in interest rates, showed a slight decline. The Refinance Index fell by 0.1% from the prior week, though it remains 85% higher than the same week last year, reflecting a robust annual surge in homeowners looking to take advantage of the lower rates.
Adjustable-rate mortgages (ARMs) also saw a decrease in interest rates. The average contract interest rate for 5/1 ARMs fell to 5.98% from 6.25%, indicating some relief for borrowers seeking more flexible loan terms.
&#8220;As observed in recent weeks, despite lower rates, purchase applications have not moved much. Prospective homebuyers are staying patient now that rates are moving lower and for-sale inventory has started to increase,&#8221; said Joel Kan, MBA's vice president and deputy chief economist.
<h3 class="wp-block-heading">Mortgage-Linked Stocks Jump To 2-Year Highs</h3>
The decline in mortgage rates is also having a notable impact on mortgage-linked stocks. The iShares Residential and Multisector Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REZ#NYSE">REZ</a>) closed 0.6% higher on Tuesday, reaching its highest levels since late August 2022. 
The ETF is currently on a 14-week winning streak, fueled by rising expectations of potential Federal Reserve interest rate cuts.
Investor sentiment toward the sector is strong, with $135 million in net inflows into the REZ ETF in August 2024 alone, marking the largest monthly influx since January 2022. This surge underscores investor optimism about the real estate market's future as borrowing costs continue to ease.
Chart: REZ ETF Surges To 2-Year Highs With 14-Week Winning Streak
<figure class="wp-block-image size-large"><a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent082824&amp;t=be2bearmibe3na1"><img loading="lazy" decoding="async" width="1024" height="439" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/28083727/image-280-1024x439.png" alt="" class="wp-image-518259" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/28083727/image-280-1024x439.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/28083727/image-280-300x129.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/28083727/image-280-768x330.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/28083727/image-280-1536x659.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/28083727/image-280.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></a><figcaption class="wp-element-caption">Image: <a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent082824&amp;t=be2bearmibe3na1">Benzinga Pro</a></figcaption></figure>
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Mortgage Rates Hit 17-Month Lows, But 'Homebuyers Are Staying Patient' As Applications Stall

Investors are increasingly eyeing the real estate sector with optimism as the Federal Reserve edges closer to initiating its <a href="https://www.benzinga.com/topic/interest-rates">much-anticipated rate-cut cycle.</a>
Real Estate Investment Trusts (REITs) have emerged as a standout performer in August, leading the market in gains while also becoming a magnet for investor inflows.
Five out of the 64 U.S.-listed real estate exchange-traded funds (ETFs) have collectively pulled in a robust $2.2 billion in net inflows over the past month. 
This influx of capital represents more than half of the total inflows that these ETFs have attracted over the entire past year, as market participants increasingly bet on the real estate sector to benefit from lower borrowing costs and more favorable financial conditions ahead of the potential Fed rate cut in September. 
Fed Chair Jerome Powell, in his remarks at the Jackson Hole Symposium, signaled that the Federal Reserve might consider lowering interest rates soon due to a noticeable cooling in the labor market. 
"The time has come for policy to adjust," he said, adding that &#8220;the cooling in labor market conditions is unmistakable.&#8221;
The Fed chair also expressed increased confidence that the economy is on a sustainable path toward the 2% inflation target. 
<h3 class="wp-block-heading">5 Real Estate ETFs Attract Inflows As Investors Jump On Rate-Cut Winners</h3>
The iShares U.S. Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYR#NYSE">IYR</a>) led the inflows, attracting $805.6 million in net investments over the past month—a sum that represents two-thirds of the fund's total inflows for the past year. 
The Vanguard Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VNQ#NYSE">VNQ</a>) –&nbsp;the largest real estate ETF with $37 billion in assets under management – saw a strong recovery in August, pulling in $613.6 million and nearly offsetting its earlier outflows, bringing its yearly inflows close to breakeven. 
The Real Estate Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLRE#NYSE">XLRE</a>) also experienced robust activity, with $498.6 million in net inflows over the last month. 
Other notable performers included the SPDR DJ Wilshire REIT ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RWR#NYSE">RWR</a>) and the iShares Residential and Multisector Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REZ#NYSE">REZ</a>), which attracted $146.7 million and $136.8 million, respectively, during August.
<figure class="wp-block-table is-style-stripes"> 
<table>
<thead>
<tr>
<th>ETF</th>
<th>1-Month Fund Flows ($mln)</th>
<th>1-Year Fund Flows ($mln)</th>
</tr>
</thead>
<tbody>
<tr>
<td>iShares U.S. Real Estate ETF </td>
<td>805.6</td>
<td>1,193</td>
</tr>
<tr>
<td>Vanguard Real Estate ETF</td>
<td>613.6</td>
<td>-2.8</td>
</tr>
<tr>
<td>Real Estate Select Sector SPDR Fund </td>
<td>498.6</td>
<td>2,063</td>
</tr>
<tr>
<td>SPDR DJ Wilshire REIT ETF </td>
<td>146.7</td>
<td>132.8</td>
</tr>
<tr>
<td>iShares Residential and Multisector Real Estate ETF</td>
<td>136.8</td>
<td>95.9</td>
</tr>
<tr>
<td>Total</td>
<td>2,201.3</td>
<td>3,481.9</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Data: TradingView, as of Aug. 27, 2024</figcaption></figure>
<h3 class="wp-block-heading">Why Real Estate Sector Benefits From Interest Rate Cuts</h3>
Lower household borrowing costs and improved refinancing opportunities, fueled by expectations of declining interest rates, can significantly boost the profitability of real estate companies.
Real estate stocks, as represented by the VNQ ETF, have climbed 35% since their October 2023 lows, with a striking 14% gain in just the last two months, far outpacing the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>)&#8217;s modest 3% rise over the same period. 
This robust outperformance in real estate stocks aligns closely with growing market expectations for impending interest rate cuts.
As illustrated in the chart below, the largest real estate ETF has moved inversely to the 2-year Treasury yield, a crucial indicator of market expectations for short-term interest rates.
<h3 class="wp-block-heading">Chart: Declining 2-Year Yields Fuel Rally In Real Estate Stocks</h3>
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="508" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/27121530/image-270-1024x508.png" alt="" class="wp-image-516548" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/27121530/image-270-1024x508.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/27121530/image-270-300x149.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/27121530/image-270-768x381.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/27121530/image-270-1536x762.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/27121530/image-270.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
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Image created using artificial intelligence via Midjourney.

Large Cap

Mid Cap

Small Cap

iShares Trust Dow Jones US Real Estate Fund Index

Investors Funnel $2.2B Into These 5 Real Estate ETFs In Anticipation Of Fed Rate Cuts

Editor's Note: This article has been updated to reflect that the data was released on Wednesday.
Positive news has emerged for U.S. homebuyers navigating the housing market, as the average interest rate on 30-year fixed-rate mortgages with conforming loan balances (up to $766,550) declined to 6.50% in the week ending Aug. 16, according to data released Wednesday by <a href="https://www.benzinga.com/topic/mortgages">the Mortgage Bankers Association. </a>
This represents the lowest level since early May 2023. The decrease in mortgage rates aligns with a dip in long-term Treasury yields, influenced by market expectations of multiple rate cuts from the Federal Reserve this year.
Last week, the 30-year Treasury yield dropped by 7 basis points, currently on track for a fourth straight month of declines. Month-to-date the long-dated Treasury bond has seen its yields tumble by about 25 basis points to the current 4.05%. 
<h3 class="wp-block-heading">Mortgage Applications Dip As Homebuyers Take A Breather</h3>
However, this rate drop did not translate into an increase in mortgage application activity. 
After two consecutive weeks of robust growth, mortgage applications fell sharply, signaling that many potential homebuyers are still in a holding pattern, likely waiting for more clarity on the Federal Reserve&#8217;s future policy direction, which could be hinted at during the upcoming Jackson Hole Symposium.
Read Also: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/08/40466528/jackson-hole-preview-5-important-questions-ahead-of-jerome-powells-fed-speech">Jackson Hole Preview: 5 Important Questions Ahead Of Jerome Powell&#8217;s Fed Speech</a>
Despite the reduced 30-year fixed mortgage rate, overall mortgage applications saw a 10.1% decline compared to the previous week, partially erasing the robust 25% gain recorded over the prior two weeks.
Refinance applications, which tend to be more sensitive to fluctuations in interest rates, dropped by 15%, cutting into the 35% surge observed in the previous week.
Similarly, applications for home purchase mortgages fell by 5%, building on the 8% decline from the prior week. 
<h3 class="wp-block-heading">Thursday&#8217;s Real Estate Stock Movers </h3>
The broader real estate sector, as tracked by the Real Estate&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLRE#NYSE">XLRE</a>), was up 0.3% during Thursday premarket trading, on track to notch the highest level since September 2022. 
The Top-performing stock within the XLRE ETF was CBRE Group, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CBRE#NYSE">CBRE</a>), up 1.1%.
Taking a closer look at mortgage-linked industries, the iShares Residential and Multisector Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REZ#NYSE">REZ</a>) was flat, after closing Tuesday at the highest level since mid-September 2022.
Major premarket gainers within the REZ ETF included Healthcare Realty Trust Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HR#NYSE">HR</a>), up 1.3%, Sabra Health Care REIT, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SBRA#NYSE">SBRA</a>), up 1.1%, and Universal Health Realty Income Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UHT#NYSE">UHT</a>), up 13%
Other mortgage sensitive stocks, such as Redfin Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/RDFN#NASDAQ">RDFN</a>) and Zillow Group Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ZG#NASDAQ">ZG</a>), were 1.2% and 0.2% higher, respectively. 
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Image created using artificial intelligence via Midjourney.

CBRE

RDFN

SBRA

30-Year Mortgage Rates Hit 15-Month Low, But Applications Pull Back After Recent Spikes: Real Estate Stocks React Wednesday (CORRECTED)

Mortgage applications skyrocketed by 16.8% in the week ending Aug. 9, according to data released Wednesday by the <a href="https://www.benzinga.com/topic/mortgages">Mortgage Bankers Association</a>.
This impressive increase follows a 6.9% rise in the previous week and represents the largest one-week jump since January 2023. 
The surge comes despite the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) remaining relatively stable at 6.54%, compared to 6.55% the week before.
<h3 class="wp-block-heading">Refinance Activity Hits Highest Level Since May 2022</h3>
The Refinance Index, which is highly sensitive to interest rate changes, surged by 35% from the previous week, marking a 118% increase compared to the same week last year. 
This sharp rise is the highest weekly gain for the Refinance Index since May 2022. 
Consequently, the refinance share of mortgage activity grew to 48.6% of total applications, up from 41.7% the previous week. Additionally, the share of adjustable-rate mortgage (ARM) applications increased to 7.3% of total applications.
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Joel Kan, MBA's vice president and deputy chief economist, commented on the data, stating, &#8220;Rates on both 30- and 15-year fixed-rate mortgages decreased for the second consecutive week, and combined with the previous week's rate moves, spurred another strong week for application activity as borrowers with higher rates took the opportunity to refinance.&#8221; 
Kan also highlighted that purchase applications increased by 3%, with modest gains across various loan types, suggesting that prospective homebuyers are gradually returning to the market.
<h3 class="wp-block-heading">Mortgage-Linked Stocks Soar To September 2022 Levels</h3>
The recent surge in mortgage activity has positively impacted mortgage-linked stocks, pushing them to their highest levels since September 2022. 
The iShares Residential and Multisector Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REZ#NYSE">REZ</a>) rose 0.3% on Wednesday, putting it on track to close the session at its highest point since September 2022.
Notably, the ETF has posted gains for 12 straight weeks, achieving its longest winning streak since the fund&#8217;s launch in 2007. Additionally, the fund has closed in the green 16 out of the last 17 weeks.
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="478" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/14104129/image-1-35-1024x478.png" alt="" class="wp-image-494968" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/14104129/image-1-35-1024x478.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/14104129/image-1-35-300x140.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/14104129/image-1-35-768x358.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/14104129/image-1-35-1536x717.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/14104129/image-1-35.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Image: <a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent081424&amp;t=be2bearmibe3na1">Benzinga Pro</a></figcaption></figure>
Below are the top-performing stocks in the REZ ETF year-to-date:
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Name</td>
<td>Ytd Return (%)</td>
</tr>
<tr>
<td>Diversified Healthcare Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/DHC#NASDAQ">DHC</a>)</td>
<td>310.64</td>
</tr>
<tr>
<td>National Health Investors, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NHI#NYSE">NHI</a>)</td>
<td>37.44</td>
</tr>
<tr>
<td>Welltower Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WELL#NYSE">WELL</a>)</td>
<td>33.37</td>
</tr>
<tr>
<td>UMH Properties, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UMH#NYSE">UMH</a>)</td>
<td>31.73</td>
</tr>
<tr>
<td>Independence Realty Trust, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IRT#NYSE">IRT</a>)</td>
<td>31.51</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">As of Aug. 14, 2024 at 10:30 a.m. ET</figcaption></figure>
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Photo via Shutterstock.

Markets

WELL

Mortgage Applications Rocket By 16.8%, Notch Strongest Weekly Increase In 1.5 Years: 'Homebuyers Took The Opportunity To Refinance'

Mortgage rates fell to their lowest levels in over a year this week, spurred by rising market expectations of interest rate cuts by the Federal Reserve, bringing some much-needed <a href="https://www.benzinga.com/topic/real-estate-investing">relief to U.S. homebuyers.</a>
As of Aug. 7, the average 30-year fixed mortgage rate dropped by 26 basis points from the previous week, settling at 6.47%. This is the lowest rate since late May 2023, according to Freddie Mac data released on Thursday.
Similarly, the average 15-year fixed mortgage rate fell by 36 basis points from the previous week to 5.63%, the lowest level since April 2023.
&#8220;The decline in mortgage rates does increase prospective homebuyers' purchasing power and should begin to pique their interest in making a move,&#8221; Freddie Mac highlighted.
Additionally, this decrease in rates is already benefiting existing homeowners. The refinancing share of mortgage applications has climbed to nearly 42%, the highest since March 2022.
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<h3 class="wp-block-heading">Goldman Sachs Sees Home Prices Rising: Fed Rate Cuts Likely to Fuel Appreciation</h3>
&#8220;Bad news is (likely) good news for home price appreciation,&#8221; wrote Goldman Sachs analyst Vinay Viswanathan in a note Thursday, highlighting the investment bank&#8217;s optimistic outlook for the housing market.
Goldman Sachs has upwardly revised its forecasts for home price appreciation (HPA) in 2024 and 2025. The bank now expects full-year 2024 HPA to reach 4.5% and 2025 HPA to come in at 4.4%. These projections are notably higher than their previous forecasts of 4.2% and 3.2%, respectively.
The bullish outlook is underpinned by Goldman Sachs economists&#8217; prediction that the Federal Reserve will implement three rate cuts this year, each by 25 basis points. 
These anticipated cuts are expected to bring the 30-year conforming mortgage rate down to 6.5% by the end of 2024 and 6.1% by the end of 2025. These figures are slightly lower than the bank&#8217;s previous forecasts of 6.6% and 6.3%, respectively.
<h3 class="wp-block-heading">Mortgage-Linked Stocks Rally</h3>
The positive sentiment surrounding the recovery of the property market extended to mortgage-linked stocks. 
The iShares Residential and Multisector Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REZ#NYSE">REZ</a>), which tracks stocks exposed to the residential property market, rose 0.6% on Thursday. 
Other sector funds, such as the VanEck Mortgage REIT Income ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MORT#NYSE">MORT</a>) and the iShares Mortgage Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REM#NYSE">REM</a>), saw gains of 0.9% and 0.8%, respectively.
Individual stocks in the mortgage business showed robust performance, with Rocket Companies Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RKT#NYSE">RKT</a>) and UWM Holdings Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UWMC#NYSE">UWMC</a>) up by 3.3% and 4.5%, respectively.
Shares of companies involved in home construction also experienced a boost. The SPDR Homebuilders ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XHB#NYSE">XHB</a>) climbed 1.6%.
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Photo: Shutterstock

Treasuries

iShares FTSE NAREIT Mortgage PLUS Capped Index Fund

UWMC

Mortgage Rates Fall To Lowest Level In Over A Year, Ease Pressure On Homebuyers: 'Good News For Home Price Appreciation'

Expectations that the Federal Reserve will soon begin cutting interest rates have driven mortgage rates to their lowest levels in over a year Wednesday, positively impacting both new mortgage applications and <a href="https://www.benzinga.com/money/mortgages">refinancing of existing loans.</a>
The average contract interest rate for 30-year fixed-rate mortgages — with conforming loan balances of $766,550 or less — fell significantly by 27 basis points to 6.55% for the week ending Aug. 2, marking the lowest rate since early May 2023
The decrease of 27 basis points from the rate of 6.82% on July 26 represents the largest weekly drop since July 2022 and reflects sizable reductions in Treasury yields.
The 30-year Treasury yield, a key benchmark for mortgage costs, dropped 34 basis points during the week ending Aug. 2, reaching approximately 4.2%. 
&#8220;Mortgage rates decreased across the board last week&#8230;following dovish communication from the Federal Reserve and a weak jobs report, which added to increased concerns of an economy slowing more rapidly than expected,&#8221; said Joel Kan, the Mortgage Bankers Association&#8217;s vice president and deputy chief economist.
<h3 class="wp-block-heading">Chart: 30-Year Mortgage Rates Drop To Levels Last Seen In May 2023</h3>
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="576" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/07085307/image-1-15-1024x576.png" alt="" class="wp-image-481621" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/07085307/image-1-15-1024x576.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/07085307/image-1-15-300x169.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/07085307/image-1-15-768x432.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/07085307/image-1-15-1536x864.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/07085307/image-1-15.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<h3 class="wp-block-heading">Demand For Mortgages Jumps, Driven By Lower Interest Rates</h3>
Mortgage applications soared by 6.9% during the week ending Aug. 2, the sharpest increase in nearly two months and fully erasing the cumulative declines in applications from the two prior weeks. 
Applications for a loan to refinance a mortgage, which are more sensitive to weekly changes in interest rates, soared by nearly 16%.&nbsp;The MBA Mortgage Refinance index rose to the highest level in two years. 
Although the Federal Reserve kept the federal funds target unchanged at its July meeting, it hinted at a possible rate cut in September. Market speculation around a Fed rate cut sharply increased as a result of a weaker-than-expected July jobs report.
Commenting on the data, MBA chief economist Mike Fratantoni said: &#8220;The weakness in this report including the slower rate of wage growth and the higher unemployment rate certainly support such a cut, but the next inflation report needs to confirm that price growth is also slowing.
"The market is moving ahead of the Fed, bringing down longer-term rates including those for mortgages, which should lead to both more home purchases and a pickup in refinance activity," he said. 
<h3 class="wp-block-heading">Market Reactions</h3>
Shares of real estate companies surged in premarket trading on Wednesday, with the Vanguard Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VNQ#NYSE">VNQ</a>) rising by 0.8%, following a 2% gain on Tuesday. The VNQ ETF is on course to reach levels not seen since January 2023.
Top premarket gainers were Howard Hughes Holding (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HHH#NYSE">HHH</a>), up 14.5%, Peakstone Realty Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PKST#NYSE">PKST</a>), up 5.4%, Opendoor Technologies Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OPEN#NYSE">OPEN</a>), up 4.6% and Hudson Pacific Properties Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HPP#NYSE">HPP</a>), up 4.4%.
Mortgage-linked stocks as tracked by the iShares Residential and Multisector Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REZ#NYSE">REZ</a>) are up over 2.5% in the premarket, after rallying 2.7% a day earlier. American Healthcare REIT, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AHR#NYSE">AHR</a>) and Community Healthcare Trust Incorporated (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CHCT#NYSE">CHCT</a>) led gains, up 9.4% and 2.9%, respectively. 
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Photo via Shutterstock.

Bonds

CHCT

OPEN

PKST

Mortgage Rates Fall To 15-Month Lows, Boost Homebuyer Demand As Federal Reserve Hints At Rate Cuts

Extra Space Storage Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EXR#NYSE">EXR</a>) shares are trading lower today. Bank of America Securities analyst Joshua Dennerlei downgraded the stock to Underperform from Neutral and lowered <a href="https://www.benzinga.com/quote/EXR/analyst-ratings" target="_blank" rel="noreferrer noopener">the price target to $155 from $172</a>.
Last week, the company reported sales of $697.1 million, <a href="https://www.benzinga.com//node/40050498" target="_blank" rel="noreferrer noopener">missing the street view of $728.8 million</a>.
Second-quarter funds from operations (FFO) came in at $2.06, surpassing the estimate of $2.00.
The company expects core FFO of $7.95-$8.15 for fiscal 2024. 
The analyst expects declining storage demand prospects through 2025, weaker demand in markets like Florida, worsened by EXR's increased exposure from the LSI merger, and limited pricing power with new customers.
Notably, move-in rents dropped 8% year-over-year in Q2, with July rates falling 12% as new customers stayed price-sensitive, writes the analyst.
Dennerlei adds that despite earlier hopes for summer improvements, peak leasing has passed, and visibility into 2025 remains unclear, potentially due to low housing churn.
The analyst revised the core FFO estimates to $8.07 for 2025 (from $8.57) and $8.26 for 2026 (previously $8.94). These are 4.1% below the Street's 2025 estimate and 5.8% below the 2026 estimate.
Also, the analyst forecasts 2025 SS NOI growth of -1.1% vs. the Street's consensus of 1.6%.
Investors can gain exposure to the stock via iShares Residential and Multisector Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REZ#NYSE">REZ</a>) and Principal Exchange-Traded Funds Principal Real Estate Active Opportunities ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BYRE#NYSE">BYRE</a>).
Price Action: EXR shares are down 3.41% at $159.33 at the last check Monday.
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Disclaimer:&nbsp;This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

News

Downgrades

Price Target

Movers

BYRE

Extra Space Storage Shares Are Down As Weak Demand, Low Housing Churn Clouds Future

Foreign investment in U.S. homes has dropped to its lowest in 15 years, as per a fresh report by the National Association of Realtors.
<a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/06/39482229/home-prices-reach-new-record-highs-yet-signs-of-normalization-emerge">Low supply and high prices</a> have scared many foreign investors away from U.S. real estate, marking the seventh consecutive yearly drop in sales for this cohort.
The U.S. Home Market Slump: Unusually high inflation has pushed mortgage rates up, forcing many homeowners to stay in their current homes, bringing the supply of houses down significantly.
In this context, people who might have been looking for a new home are incentivized to stick to their low mortgage rates instead of selling their home in exchange for a more expensive mortgage.
The fall home sales hit its worst point in 28 years during 2023; and 2024 is lining up to be even worse. Looking at completed sales up to April, at this rate, 2024 would come with a drop of almost 2% since the previous year.
The panorama could change if the Fed decides to drop interest rates in an upcoming meeting. During a Wednesday call, a Bank of America economist <a href="https://www.benzinga.com//node/39819662">argued that the most likely rate cut will come in December</a>, against consensus from other colleagues who expect a drop by September.
Anticipation for an upcoming rate cut already caused a positive effect on the real estate market. On Wednesday, one report showed mortgages have come down to a four-month low last week, <a href="https://www.benzinga.com/real-estate/reit/24/07/39816656/fed-rate-cut-expectations-drop-mortgage-rates-to-4-month-lows-surge-in-new-applications-refinanc">with new applications up by almost 4%</a>.
<h1 class="wp-block-heading">Why Do Foreign Nationals Buy Houses In The U.S. And Why Are They Stopping?</h1>
The realtors report looked at two types of investor: foreign buyers who don't reside in the U.S. as well as visa holders who are not permanent immigrants, or new immigrants with less than two years in the country.
Foreign-born individuals with permanent U.S. residencies are not accounted for. For the groups examined, 45% of homes were purchased for use as a rental unit, vacation house, or both.
Yet the intended use of the homes varied greatly between the country of origin of the buyer. Forty-nine percent of Canadian buyers intend to use their homes for vacation, and only 16% as a permanent residency. For buyers from India, it was 6% for vacation and 66% for permanent residency.
Foreign investors might be lured by the U.S. real estate market as a way to diversify their foreign real estate investments in a market that has typically gone up with time.
Yet, the landscape for international buyers has been even worse than for U.S. buyers.&nbsp;
The U.S. dollar has strengthened against foreign currency in previous years, making it even more expensive for investors holding their capital in euros, Chinese yuan or Canadian dollars to purchase a U.S. home. 
Read Also: <a href="https://www.benzinga.com//node/39812270">Jerome Powell&#8217;s Top Advisor Hints At Fed&#8217;s Potential Rate Cut Plans: &#8216;All Moving In The Right Direction&#8217;</a>
While at a slower rate, foreign buyers continued to purchase homes in the U.S., with California, Florida, Texas and Arizona as main destinations. Against some prime locations around the world, the price per square meter for residential properties in the U.S. remains very competitive.
The price per square meter for a home in the San Jose-Sunnyvale-Santa Clara area in California is almost half that of Hong Kong. In Boulder, Colorado, a square meter costs half of that of Oslo, Norway, and a third of the average Canadian price.
In the period running from April 2023 to March 2024, there were only 54,300 U.S. homes sold to international buyers, the lowest it's been since the association began measuring the data point in 2009. This marks a whopping 36% decline since the previous year.
In dollars, this meant a 21% decrease, with purchases worth only $42 billion against $153 billion in 2017
But this year's drop is no exception. There have been year-over-year drops for the last seven periods, from a recent peak of 284,500 U.S. homes bought by foreigners in 2017.
Those who did buy a house in America did it for a higher price. The average sale reached $780,300, a 22% spike from the previous year.
<h1 class="wp-block-heading">Impact On The Market</h1>
Foreign buyers accounted for only 1.3% of all U.S. home sales during the April 2023-March 2024 period, yet they represent a much more significant portion of the market in specific locations like Florida, Texas and California.
While the report analyzed a drop in foreign sales, most of its reasons are domestic, serving to better understand the state of the real estate market for homes in the U.S.
The drop in supply stemming from the rise in interest rates has affected U.S. buyers as much as foreigners.
<a href="https://www.benzinga.com/markets/equities/24/06/39204534/european-central-bank-cuts-interest-rates-by-0-25-but-projects-inflation-above-target-well-into-">Upcoming cuts in interest rates across the globe, and specially in Europe</a> could soon reignite foreign interest in the U.S. market. This might be even more true if it falls in line with an increased supply of homes that could come if mortgage rates continue to drop.
There are several real estate companies focused on the residential sector that are part of the S&amp;P 500 index. These include Equity Residential (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EQR#NYSE">EQR</a>), Essex Property Trust Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ESS#NYSE">ESS</a>), Mid-America Apartment Communities Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MAA#NYSE">MAA</a>), AvalonBay Communities Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AVB#NYSE">AVB</a>) and Invitation Homes Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/INVH#NYSE">INVH</a>).
Most real estate ETFs are not pure-play residential, with the exception of iShares Residential and Multisector Real Estate (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REZ#NYSE">REZ</a>). Others follow the U.S. real estate market more broadly but are still liable to be affected by swings in the residential home market. These include Vanguard Real Estate Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VNQ#NYSE">VNQ</a>) and Schwab US REIT ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SCHH#NYSE">SCHH</a>) among the largest.
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Foreigners Don't Want Your US Home: Sales Drop To 15-Year Lows For International Buyers

June closed on a high note for the stock market, with the S&amp;P 500, tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), gaining 3.2%, despite significant disparities in <a href="https://www.benzinga.com/etfs">sector and industry performances.</a>
The technology sector, as tracked by the Technology Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLK#NYSE">XLK</a>), led the 11 S&amp;P 500 sectors in performance last month, surging 7.7% and achieving its strongest monthly gain this year. 
In stark contrast, utilities lagged, with the Utilities Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLU#NYSE">XLU</a>) dropping 6.3%, marking the worst month since September 2023.
<h3 class="wp-block-heading">Top Performing Industry ETFs In June</h3>
The iShares Expanded Tech-Software Sector ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IGV#NYSE">IGV</a>) rallied 11.3% last month, topping the rankings among industry ETFs. 
Hot on its heels was the VanEck Semiconductor ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SMH#NYSE">SMH</a>), which climbed 8.4%, showcasing strong momentum in the semiconductor sector. 
Since hitting its low in October 2023, the VanEck Semiconductor ETF has rallied by an astounding 87%, and over 200% since October 2022, reflecting the spectacular growth in AI-driven stocks.
Securing the third spot in terms of monthly performance, the SPDR S&amp;P Biotech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XBI#NYSE">XBI</a>) gained 4%. 
Within the software sector, standout performers included Adobe Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ADBE#NASDAQ">ADBE</a>), which surged by 24.9%, CrowdStrike Holdings, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CRWD#NASDAQ">CRWD</a>) with a 22.1% increase, and Oracle Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ORCL#NYSE">ORCL</a>), up by 20%.
Broadcom Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AVGO#NASDAQ">AVGO</a>) led chipmakers with a 21% rise. Universal Display Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OLED#NYSE">OLED</a>) followed closely with a 19.7% increase, and Qorvo, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QRVO#NASDAQ">QRVO</a>) posted an 18% gain. 
Among chipmakers, Broadcom Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AVGO#NASDAQ">AVGO</a>), Universal Display Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OLED#NYSE">OLED</a>) and Qorvo, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QRVO#NASDAQ">QRVO</a>) led gains, with performances of 21%, 19.7% and 18%, respectively.
In the biotech arena, Scilex Holding Company (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SCLX#NASDAQ">SCLX</a>) experienced a 78.8% spike, making it the top industry gainer. Alnylam Pharmaceuticals, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ALNY#NASDAQ">ALNY</a>) surged by 63.7%, while Avidity Biosciences, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/RNA#NASDAQ">RNA</a>) saw a robust 52% increase.
<h3 class="wp-block-heading">Top Performing Industry ETFs By Inflows In June</h3>
Examining fund flows, the VanEck Semiconductor ETF has emerged as a top choice for investors, attracting over $1 billion according to Tradingview data, and achieving its ninth consecutive month of inflows. Year-to-date the fund has registered $4.60 billion in net inflows.
The iShares Expanded Tech-Software Sector ETF pulled in approximately $480 million in June, breaking a six-month streak of outflows and registering its highest monthly inflows since September 2022. Yet, its year-to-date net flows are still negative, down by $1.15 billion. 
The iShares Biotechnology ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IBB#NYSE">IBB</a>) collected $148 million in inflows last month, reflecting strong investor interest. Another industry witnessing robust inflows was represented by the Global X Copper Miners ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COPX#NYSE">COPX</a>), which attracted about $130 million.
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Photo: Shutterstock

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Top Performing Industry ETFs In June: Software Leads Returns, Chipmakers Attract Most Inflows

Residential house prices continued their upward trend, reaching new all-time highs in April 2024, yet the pace of growth has slowed, potentially suggesting<a href="https://www.benzinga.com/topic/housing-market"> early signs of normalization.</a>
The resilience of house prices was broad-based across the country, with all 20 of the largest U.S. metropolitan areas showing positive monthly increases. San Diego led the annual gains with double-digit growth.
<h3 class="wp-block-heading">April&#8217;s House Price Index: Key Highlights</h3>
<ul>
<li>U.S. house prices rose 0.2% month-over-month in April, up from a revised flat reading in March, according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index. This increase fell short of economist expectations of a 0.3% growth, as reported by Econoday.</li>
<li>House prices rose 6.3% from April 2023 to April 2024, slowing from the 6.7% year-over-year growth recorded in March 2024.</li>
<li>For the nine census divisions, seasonally adjusted monthly price changes from March 2024 to April 2024 ranged from -0.2% in the West South Central and Middle Atlantic divisions to +1.4% in the East South Central division. The 12-month changes were all positive, ranging from +3.0% in the West South Central division to +8.5% in the New England and Middle Atlantic divisions.</li>
</ul>
<h3 class="wp-block-heading">April&#8217;s S&amp;P CoreLogic Case-Shiller Index: Key Highlights</h3>
<ul>
<li>The 20-city S&amp;P CoreLogic Case-Shiller U.S. National Home Price Index reported a 7.2% seasonally unadjusted annual gain for April, down from a 7.4% annual gain in the previous month. This marks the first year-over-year deceleration in U.S. residential real estate prices, though it exceeded forecasts of 7% growth.</li>
<li>On a month-over-month basis, the 20-city index rose by 1.4%, slightly decelerating from March&#8217;s 1.6% increase.</li>
<li>San Diego continued to report the highest annual gain among the 20 cities in April, with a 10.3% increase, followed by New York and Chicago, with increases of 9.4% and 8.7%, respectively. Portland recorded the smallest year-over-year growth, with a 1.7% annual increase in April.</li>
</ul>
<h3 class="wp-block-heading">Economist Takes</h3>
"For the second consecutive month, we've seen our National Index jump at least 1% over its previous all-time high," Brian D. Luke, head of commodities, real &amp; digital assets at S&amp;P Dow Jones indices, said. 
Luke stated that 2024 was closely mirroring the strong start observed in the previous year. He mentioned that March and April had posted the largest rise, before a slowdown occurred in the summer and fall.
&#8220;Heading into summer, the market is at an all-time high, once again testing its resilience against the historically more active time of the year,&#8221; he added.
Luke also highlighted that 13 markets were currently at all-time highs, with San Diego leading once again, topping annual returns for the last six months.
A more cautious outlook came from Dr. Anju Vajja, deputy director for FHFA's Division of Research and Statistics, who noted that despite the rise in April, the appreciation rate slowed amid a slight rise in both mortgage rates and housing inventory. 
&#8220;The housing market in general began to show some signs of normalization,&#8221; she added.
<h3 class="wp-block-heading">Market Reactions</h3>
The housing data released Tuesday failed to trigger a positive reaction on real estate stocks, as hawkish Fed remarks pushed Treasury yields slightly higher. 
The&nbsp;Real Estate&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLRE#NYSE">XLRE</a>) was 0.9% lower at 09:05 a.m. in New York, eyeing its worst session in nearly a month. 
Both the Vanguard Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VNQ#NYSE">VNQ</a>) and the iShares Residential and Multisector Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REZ#NYSE">REZ</a>) similarly fell 0.8%. 
The VanEck Mortgage REIT Income ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MORT#NYSE">MORT</a>) showed more contained losses, down 0.3%. 
SBA Communications Corporation (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SBAC#NASDAQ">SBAC</a>) and Weyerhaeuser Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WY#NYSE">WY</a>) were the laggards within the XLRE ETF, both down 1.7%. 
The 30-year Treasury yield, a key benchmark for mortgage rates, rose by 2 basis points to 4.38%, sending the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) down by 0.2%. 
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Home Prices Reach New Record Highs, Yet 'Signs Of Normalization' Emerge

The median U.S. asking rental price saw an annual 0.8% increase in May to $1,653, marking the highest level since October 2022, sustaining an upward trend driven by robust <a href="https://www.benzinga.com/real-estate/reit">demand and constrained supply.</a>
This is the second consecutive month of rent increases following nearly a year of declines, highlighting the ongoing affordability challenges renters face nationwide, according to Redfin data.
The recent uptick in the median asking rent, which now stands just $47 below the record high, saw significant increases in Washington, D.C., Cincinnati, and Chicago, all of which experienced double-digit growth.
On Tuesday, the iShares Residential and Multisector Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REZ#NYSE">REZ</a>) declined by 0.9%, while the Tidal ETF Trust Residential REIT ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HAUS#NYSE">HAUS</a>) edged down by 0.1%.
<h3 class="wp-block-heading">Young Renters Demand Remains Strong, Backlog Of New Units Temper Increases</h3>
"Demand from young renters remains high, as many of them are opting to stay put rather than contend with an increasingly unaffordable homebuying market," said Redfin senior economist Sheharyar Bokhari. 
"But so far, rent price growth has been limited because there are enough new apartments to meet demand, even in the busiest time of year for the rental market."
Despite a recent decline in multifamily building starts below their 10-year historical average, a backlog of new units continues to hit the market each month, tempering rent price growth.
<h3 class="wp-block-heading">Regional Rent Trends</h3>
Washington, D.C. saw the highest annual increase in median asking rent in May, jumping 11.1%, the largest rise among the 33 major U.S. metropolitan areas examined by Redfin. Other notable increases were recorded in Cincinnati (10.9%), Chicago (10.8%), Virginia Beach (10.3%), and Minneapolis (10.3%).
On the flip side, significant rent declines were observed in Jacksonville (-10.1%), San Diego (-8.7%), Austin (-7.2%), Seattle (-5.9%), and Phoenix (-5.5%).
According to Redfin analysis, the Sun Belt&#8217;s rent reductions are partly due to the region&#8217;s aggressive apartment construction to accommodate the influx of new residents during the pandemic. As the housing boom wanes, these areas are experiencing higher vacancies, which is driving rents down.
Meanwhile, many cities in the Midwest are seeing rent increases as fewer new apartments are being built. The Midwest&#8217;s relative affordability continues to attract renters, boosting demand despite the national housing affordability crisis.
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As April comes to a close, it&#8217;s time to compile the rankings for the top-performing sector and industry exchange-traded <a href="https://www.benzinga.com/etfs">funds of the month.</a>
Taking a broader look at the stock market, the S&amp;P 500 Index, represented by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), finished April on a downturn, declining by approximately 3%. This marks the end of a five-month streak of gains.
Similarly, the tech-heavy Nasdaq 100, tracked by the Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), experienced a 3.5% decline.
Among large-cap indices, blue-chip stocks showed slight underperformance, with the SPDR Dow Jones Industrial Average ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>) slipping by 4.5%.
Small-cap stocks, represented by the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>), plummeted by over 6%, marking their worst performance since October 2023.
Overall, it has been a challenging month for the stock market, primarily due to inflation surprises surpassing expectations. This has led to a recalibration of market expectations regarding potential Federal Reserve rate cuts.
Additionally, complex global geopolitical tensions have emerged, notably between Israel and Iran, alongside the ongoing issue in the Gaza Strip.
May is anticipated to start with a crucial event as investors await the Federal Reserve Open Market Committee <a href="https://www.benzinga.com/general/macro-notification/24/04/38526201/is-hawkish-shift-on-inflation-imminent-wall-street-analysts-traders-brace-for-fed-impa">(FOMC) meeting on Wednesday. </a>
While no interest rate changes are expected, all eyes will be on Fed Chair Jerome Powell&#8216;s remarks to assess the Fed&#8217;s stance in response to recent inflation surprises.
Read also: <a href="https://www.benzinga.com/general/macro-notification/24/04/38491988/federal-reserve-meeting-preview-high-interest-rates-need-more-time-to-work-bank-of-ame">Federal Reserve Meeting Preview: High Interest Rates &#8216;Need More Time To Work,&#8217; Bank of America Says</a>
<h2 class="wp-block-heading">Performance Of Sector ETFs In April 2024</h2>
At the sector level, only the utilities sector managed to avoid losses for the month, rising by 2.1%.
The largest stock contributors to the utilities&#8217; performance in April are NextEra Energy, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NEE#NYSE">NEE</a>), The Southern Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SO#NYSE">SO</a>), Dominion Energy, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/D#NYSE">D</a>) and NRG Energy (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NRG#NYSE">NRG</a>) which showed monthly gains between 4% and 8%. 
Energy stocks remained broadly stable, while the other nine S&amp;P 500&#8217;s sectors showcased losses.
Real estate experienced the worst performance, down by over 7%, dragged down by its high sensitivity to interest rates, as Treasury yields increase across the board during the month. 
Following real estate, the technology and healthcare sectors also showed poor performance in April.
<h4 class="wp-block-heading">April&#8217;s Best And Worst Sector ETFs: Utilities Lead, Real Estate Lags</h4>
<figure class="wp-block-table is-style-stripes"> 
<table>
<thead>
<tr>
<th>Sector</th>
<th>April 2024 performance</th>
</tr>
</thead>
<tbody>
<tr>
<td>Utilities Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLU#NYSE">XLU</a>)</td>
<td>2.06%</td>
</tr>
<tr>
<td>Energy&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>)</td>
<td>0.01%</td>
</tr>
<tr>
<td>Consumer Staples&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLP#NYSE">XLP</a>)</td>
<td>-1.11%</td>
</tr>
<tr>
<td>Industrials&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLI#NYSE">XLI</a>)</td>
<td>-3.23%</td>
</tr>
<tr>
<td>Consumer Discretionary&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLY#NYSE">XLY</a>)</td>
<td>-3.68%</td>
</tr>
<tr>
<td>Financial Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLF#NYSE">XLF</a>)</td>
<td>-3.85%</td>
</tr>
<tr>
<td>Materials&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLB#NYSE">XLB</a>)</td>
<td>-4.13%</td>
</tr>
<tr>
<td>Communication Services Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLC#NYSE">XLC</a>)</td>
<td>-4.24%</td>
</tr>
<tr>
<td>Technology Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLK#NYSE">XLK</a>)</td>
<td>-4.78%</td>
</tr>
<tr>
<td>Health Care&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLV#NYSE">XLV</a>)</td>
<td>-4.85%</td>
</tr>
<tr>
<td>Real Estate&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLRE#NYSE">XLRE</a>)</td>
<td>-7.83%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Data as of Apr. 30, 2024 2:50 p.m. EDT</figcaption></figure>
<h2 class="wp-block-heading">Performance Of Industry ETFs In April 2024</h2>
Based on the industry ETF list provided by BlackRock Inc.&#8217;s (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BLK#NYSE">BLK</a>) iShares, only five out of the 25 industries managed to report gains in April. Among them, miners did well across the board, with silver, copper, and gold mining stocks reporting robust gains. 
Standout contributors to the mining industry&#8217;s outperformance in April were Pan American Silver Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PAAS#NYSE">PAAS</a>), up over 20%, Newmont Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NEM#NYSE">NEM</a>), up 14%, Anglo American plc (OTCPK: AAUKF), up over 40%
Energy producers also managed to end the month in the green.
On the bottom side of the industry rankings, homebuilders, transportation, biotech stocks, digital infrastructure and real estate all report losses between 7% and 9.6% in April.
<figure class="wp-block-table is-style-stripes"> 
<table>
<thead>
<tr>
<th>ETF Name</th>
<th>Performance</th>
</tr>
</thead>
<tbody>
<tr>
<td>iShares MSCI Global Silver and Metals Miners ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLVP#NYSE">SLVP</a>)</td>
<td>12.11%</td>
</tr>
<tr>
<td>iShares Copper and Metals Mining ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COPX#NYSE">COPX</a>)</td>
<td>9.50%</td>
</tr>
<tr>
<td>iShares MSCI Global Gold Miners ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RING#NYSE">RING</a>)</td>
<td>5.93%</td>
</tr>
<tr>
<td>iShares MSCI Global Metals &amp; Mining Producers ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PICK#NYSE">PICK</a>)</td>
<td>2.81%</td>
</tr>
<tr>
<td>iShares MSCI Global Energy Producers ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FILL#NYSE">FILL</a>)</td>
<td>2.46%</td>
</tr>
<tr>
<td>iShares U.S. Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ITA#NYSE">ITA</a>)</td>
<td>-1.16%</td>
</tr>
<tr>
<td>iShares U.S. Oil &amp; Gas Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IEO#NYSE">IEO</a>)</td>
<td>-1.37%</td>
</tr>
<tr>
<td>iShares Residential and Multisector Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REZ#NYSE">REZ</a>)</td>
<td>-1.66%</td>
</tr>
<tr>
<td>iShares Lithium Miners and Producers ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ILIT#NYSE">ILIT</a>)</td>
<td>-3.30%</td>
</tr>
<tr>
<td>iShares U.S. Broker-Dealers &amp; Securities Exchange ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IAI#NYSE">IAI</a>)</td>
<td>-3.74%</td>
</tr>
<tr>
<td>iShares U.S. Financial Services ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYG#NYSE">IYG</a>)</td>
<td>-3.88%</td>
</tr>
<tr>
<td>iShares Expanded Tech Sector ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IGM#NYSE">IGM</a>)</td>
<td>-4.37%</td>
</tr>
<tr>
<td>iShares Semiconductor ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SOXX#NYSE">SOXX</a>)</td>
<td>-4.40%</td>
</tr>
<tr>
<td>iShares U.S. Healthcare Providers ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IHF#NYSE">IHF</a>)</td>
<td>-4.79%</td>
</tr>
<tr>
<td>iShares U.S. Insurance ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IAK#NYSE">IAK</a>)</td>
<td>-4.85%</td>
</tr>
<tr>
<td>iShares U.S. Regional Banks ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IAT#NYSE">IAT</a>)</td>
<td>-5.11%</td>
</tr>
<tr>
<td>iShares U.S. Pharmaceuticals ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IHE#NYSE">IHE</a>)</td>
<td>-5.38%</td>
</tr>
<tr>
<td>iShares U.S. Oil Equipment &amp; Services ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IEZ#NYSE">IEZ</a>)</td>
<td>-5.45%</td>
</tr>
<tr>
<td>iShares Mortgage Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REM#NYSE">REM</a>)</td>
<td>-5.57%</td>
</tr>
<tr>
<td>iShares U.S. Medical Devices ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IHI#NYSE">IHI</a>)</td>
<td>-5.75%</td>
</tr>
<tr>
<td>iShares Global Timber &amp; Forestry ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WOOD#NYSE">WOOD</a>)</td>
<td>-6.20%</td>
</tr>
<tr>
<td>iShares Expanded Tech-Software Sector ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IGV#NYSE">IGV</a>)</td>
<td>-6.76%</td>
</tr>
<tr>
<td>iShares U.S. Digital Infrastructure and Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IDGT#NYSE">IDGT</a>)</td>
<td>-7.12%</td>
</tr>
<tr>
<td>iShares Biotechnology ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IBB#NYSE">IBB</a>)</td>
<td>-7.23%</td>
</tr>
<tr>
<td>iShares U.S. Transportation ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYT#NYSE">IYT</a>)</td>
<td>-8.34%</td>
</tr>
<tr>
<td>iShares U.S. Home Construction ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ITB#NYSE">ITB</a>)</td>
<td>-9.60%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Data as of Apr. 30, 2024 3:15 p.m. EDT</figcaption></figure>
Now read: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/04/38497224/ai-data-centers-drive-electricity-demand-goldman-sachs-picks-16-stocks-to-play-the-">AI Data Centers Drive Electricity Demand: Goldman Sachs Picks 16 Stocks To Play The Trend</a>
Image generated using artificial intelligence via Midjourney.

Market Summary

Commodities

AAUKF

SPDR Dow Jones Industrial Average ETF Trust

FILL

iShares Dow Jones US Broker Dealers Index Fund

iShares Dow Jones US Insurance Index Fund

iShares Dow Jones US Regional Banks Index Fund

iShares U.S. Digital Infrastructure and Real Estate ETF

IDGT

iShares Dow Jones US Oil & Gas Exploration & Production Index Fund

iShares Dow Jones US Oil Equipment & Services Index Fund

iShares Dow Jones US Pharmaceuticals Index Fund

iShares Dow Jones US Health Care Provides Index Fund

iShares Dow Jones US Medical Devices Index Fund

ILIT

iShares Dow Jones US Aerospace & Defense Index Fund

iShares Dow Jones US Homenstruction Index Fund

iShares Trust Dow Jones US Financial Services Index Fund

iShares Dow Jones Transportation Average Index Fund

PAAS

PICK

RING

SLVP

iShares S&P Global Timber & Forestry Index Fund

WOOD

Select Sector SPDR-Consumer Discretionary

April Showers On Wall Street:  Miners, Utilities Emerge As Bright Spots In Gloomy Market

The recent uptick in rental prices presents a mixed bag for investors, buoying the outlook for residential real estate stocks while simultaneously stirring inflationary concerns that could complicate efforts to achieve the <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/03/37593207/february-inflation-will-guide-feds-policy-course-return-to-2-target-faces-challenge">Federal Reserve&#8217;s 2% inflation target. </a>
What Happened: The median U.S. asking rent saw a 2.2% increase year over year in February, reaching $1,981, marking the most significant gain since January 2023, with a month-on-month increase of 0.9%, as revealed by <a href="https://www.redfin.com/news/redfin-rental-report-february-2024/">Redfin</a>. This rise is partly attributed to the &#8220;base effect,&#8221; given that rents were at their lowest in February 2023, leading to an amplified annual rate increase.
The rental price surge is predominantly driven by the Northwest and Midwest regions. In the Northeast, the median asking rent escalated by 5.2% year over year to $2,481 in February, the most substantial increase in nine months. The Midwest witnessed a similar trend, with rents climbing 4.9% to $1,441, marking the most significant rise in five months. Contrastingly, in the South and West, rent adjustments were minimal, with a 0.3% increase to $1,635 and a slight 0.1% decrease to $2,349, respectively.
Why It Matters: The uptick in mortgage rates observed in February dampened the spirits of potential homebuyers who had recently seen a beacon of hope as rates began to decrease. 
&#8220;Mortgage rates ticked back up in February — a disappointing development for prospective homebuyers, who just a few months ago got a glimmer of hope as rates finally started to fall," noted Daryl Fairweather, Redfin&#8217;s chief economist. The persistently high rates have led many to opt for renting over buying, thus bolstering rental demand and subsequently, rental prices.
Shelter costs — which include owners' equivalent rent (OER), rent of primary residence (Rent) and smaller contributions from lodging away from home, tenants' and household insurance, and the rental equivalence for vacation homes and timeshares — carry a significant weight, comprising 36% of the Consumer Price Index (CPI) basket. This hefty component underscores the direct influence of housing costs on the broader inflationary landscape.
The Federal Reserve has made substantial headway in reducing inflation over the past 18 months. However, the last stretch towards achieving the 2% target warrants caution, especially given the current dynamics in the housing market.
While the Fed has made significant progress in lowering over the past 18 months, caution for the last mile reaching the 2% is warranted. 
Stock reactions: Reflecting the rising rent conditions within the residential real estate sector, the iShares Residential and Multisector Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REZ#NYSE">REZ</a>) experienced a 4.5% growth over the past month. Notable performers in this industry include UMH Properties, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UMH#NYSE">UMH</a>), which saw an 11% increase, Independence Realty Trust, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IRT#NYSE">IRT</a>), with a 9% uptick, and Camden Property Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CPT#NYSE">CPT</a>), rising by 7% over the same period.
Read Now: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/03/37594690/economist-predicts-a-1995-style-fed-cut-cycle-as-animal-spirits-on-the-loose-for-bi">Economist Predicts A 1995-Style Fed Cut Cycle As &#8216;Animal Spirits&#8217; On The Loose For Bitcoin, Gold, Other Asset Classes</a>
Photo: Shutterstock

Rising Rents Complicates Fed's Disinflation Goal, Offers Tailwind To Residential REIT Stocks

Mortgage rates moved lower again last week, after rising in three of the <a href="https://www.benzinga.com/topic/mortgages">previous four weeks</a>. 
This will come as a welcome relief to the hundreds of thousands of homeowners and loan applicants, who followed Wednesday&#8217;s <a href="https://www.benzinga.com/topic/fomc">Federal Reserve outcome with trepidation.</a>
Mortgage rates are highly influenced by the Federal Reserve&#8217;s Fed funds rate. Indeed, all kinds of rates and indexes are linked to the base rate — from bank lending and savings rates to credit cards.
The Fed funds rate peaked in July last year at 5.25%-5.5% and roughly three months later, the average 30-year mortgage peaked at 7.79%, according to data from mortgage services broker Freddie Mac.
But while the Fed hasn&#8217;t moved on its main interest rate since July, the mortgage rate, since the October high, has fallen to 6.63% as of last week on expectations the Fed will soon start to cut rates.
<h3 class="wp-block-heading">Fed Pushes Back On March Cut</h3>
Some observers are now fearing mortgage and other loan rates could move higher again, after the Fed, on Wednesday, pushed back hopes of a March rate cut.
Powell made it clear to markets expecting a March cut: &#8220;I don't think it&#8217;s likely that the committee will reach a level of confidence by the time of the March meeting to identify March as the time to do that.&#8221;
Markets made it clear that they didn&#8217;t like Powel&#8217;s take. When the trading session was over, the S&amp;P 500 was 1.6% lower. The SPDR S&amp;P 500 (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) — the exchange-traded fund that tracks the index — also fell 1.6%.
Also Read: <a href="https://www.benzinga.com/news/earnings/24/01/36853591/mortgage-rates-soar-cash-buyers-score-the-new-homebuying-playbook">Mortgage Rates Soar, Cash Buyers Score: The New Homebuying Playbook</a>
<h3 class="wp-block-heading">Homebuilders Mount Recovery</h3>
On Thursday, markets rallied modestly and homebuilders were encouraged by the fall in mortgage rates, with D.R. Horton (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DHI#NYSE">DHI</a>) and Lennar (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LEN#NYSE">LEN</a>) the two biggest stocks in the sector both added around 2%.
The iShares U.S. Home Construction ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ITB#NYSE">ITB</a>), an exchange-traded fund that tracks the homebuilders sector, gained 1.5%.
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/01150247/newplot-62.png" alt="" class="wp-image-202059" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/01150247/newplot-62.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/01150247/newplot-62-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
Sam Khater, Freddie Mac&#8217;s chief economist, said of the latest fall in mortgage rates: &#8220;Although affordability continues to impact homeownership, the combination of a solid economy, strong demographics and lower mortgage rates are setting the stage for a more robust housing market.&#8221;
The most recent mortgage application data indicated that affordability was still very much an issue. In the week to January 26, applications slumped 7.2% according to <a href="https://tradingeconomics.com/united-states/mortgage-applications">data</a> from the Mortgage Bankers Association.
<h2 class="wp-block-heading">Residential REITs Dip</h2>
Residential real estate investment trusts, however, remained mostly on the losing side of the S&amp;P 500 index.
Equity Residential (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EQR#NYSE">EQR</a>) fell 0.4%, while Avalon Bay Communities (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AVB#NYSE">AVB</a>) fell 1.5%.
The iShares Residential and Multisector Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REZ#NYSE">REZ</a>) inched 0.3% higher.
Now Read: <a href="https://www.benzinga.com/markets/equities/24/02/36894471/markets-believe-the-fed-got-it-wrong-rate-cut-reluctance-shakes-rattles-investors">Markets Believe The Fed Got It Wrong: Rate Cut Reluctance Rattles Investors</a>

General

Mortgage Rates Fall: But Could Fed Pushback On March Rate Cut Dent Homeowner Hopes?

<a href="https://www.redfin.com/news/redfin-rental-report-september-2023/" title="https://www.redfin.com/news/redfin-rental-report-september-2023/">https://www.redfin.com/news/redfin-rental-report-september-2023/</a>

Redfin Rental Market Tracker Shows Median US Asking Rent Rose Just 0.4% YoY; Asking Rents Climbing In Midwest And Northeast And Falling In West

The iShares Residential and Multisector Real Estate ETF (ARCA: REZ) is down over 31% year-to-date, as real estate investment trusts (REITs) are some of the most sensitive assets to changes in interest rates. Nearly a third of the ETF&rsquo;s 41 holdings are invested in healthcare REITs with Public Storage (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/psa#NYSE">PSA</a>) and Welltower being its top two holdings accounting for 12% and 7.82% of the <a href="https://www.benzinga.com/markets/asia/22/11/29486458/these-2-reits-have-soaring-yields-mortgage-reits-versus-equity-reits">total portfolio, respectively</a>.
Not to mention, healthcare REITs are among&nbsp;the top-performing REIT sectors since 2009, averaging an annualized 10-year return of approximately 12%, as reported by SPGlobal.&nbsp;With earnings set to be released after the market closes on Monday, it will be interesting to see how rising interest rates have impacted the following two REITs&#39; quarterly earnings.
Also Read:&nbsp;<a href="https://www.benzinga.com/markets/commodities/22/11/29582101/housing-is-the-canary-in-the-coal-mine-hey-jerome-powell-are-you-listening">&#39;Housing Is the Canary In The Coal Mine&#39; Hey Jerome Powell, Are You Listening?</a>
Sabra Health Care REIT Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/sbra#NASDAQ">SBRA</a>) is offering a dividend yield of 8.84% or $1.20 per share annually, through quarterly payments, with an inconsistent track record of increasing its dividends. Sabra Health Care REIT operates one segment that owns and invests in healthcare real estate. Its operations include nursing facilities, assisted living centers, and mental health facilities primarily in the United States. Sabra&rsquo;s portfolio consists of over 406 properties, with skilled nursing/transitional care services accounting for roughly 61% of the asset&nbsp;concentration.
Sabra is set to report its third-quarter earnings after the market closes and is expected to report quarterly earnings at $0.16 per share on revenue of $155.21 million. The company had yet to report earnings at the time of publication.
Welltower OP Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/well#NYSE">WELL</a>) is offering a dividend yield of 3.99% or $2.44 per share annually, utilizing quarterly payments, with an inconsistent track record of increasing its dividend payments. Welltower owns a diversified healthcare portfolio of over 1,800 in-place properties spread across the senior housing, medical office, and skilled nursing/post-acute care sectors. Welltower also has over 100 properties in both Canada and the United Kingdom as the company looks for additional investment opportunities in countries with mature healthcare systems that operate similarly to that of the United States, as of 2021.
Welltower reported&nbsp;third-quarter earnings on Tuesday, coming in at $0.84 per share with $1.47 million in&nbsp;revenue,<a href="https://www.benzinga.com/real-estate/reit/22/09/28915329/8-of-the-highest-yielding-equity-reits"> compared to an estimate of $1.46 billion</a>.
To read about the latest developments in the industry, check out <a href="https://www.benzinga.com/real-estate">Benzinga&#39;s real estate home page&nbsp;</a>

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