Alex Pettee, CFA
Real Estate Weekly Review: Fed Pauses, REITs Rally
The REIT rejuvenation continued this week after the Federal Reserve signaled a continued pause in monetary policy. REITs pushed their 2019 gains above 15%.
Moderating inflation and slowing global growth has pushed the 10-year yield to the lowest level in 14 months. The 30-year mortgage rate, meanwhile, dipped to the lowest since February 2018.
Home sales data remains choppy, but existing home sales data beat estimates in February. Forward-looking metrics continue to point to a reacceleration this year.
Lower oil prices and easing trade tensions have relieved the broader inflationary pressure felt in 2018, but housing inflation remains unyielding and has picked up since late last year.
Rent growth accelerated to the fastest rate since 2016, according to Yardi. Demand for apartments remains unwavering while supply across the broader US housing sector cooled in 2018.