Keepin' It Real 

Economics, Housing, & Commercial Real Estate Analysis

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  • Alex Pettee, CFA

Daily Recap: REITs Gain | Stocks Flat | Home Sales Jump

On a relatively quite day following the closely-watched Federal Reserve rate cut announcement yesterday, the S&P 500 ETF (SPY) finished roughly flat on the day, climbing less than 0.1 while the Nasdaq ETF (QQQ) finished higher by 0.2%. Adding to it's 2% gains so far this week,, the broad-based REIT ETF (VNQ) finished slightly higher, gaining 0.2% on the day. The single family rental, cell tower, and data center REIT sectors were the relative outperformers on the day while the mall, hotel, and apartment REIT sectors were the relative laggards.

The Hoya Capital Housing Index, the benchmark that tracks the performance of the US housing industry, finished the day fractionally lower, led to the upside by the Real Estate Insurance and Real Estate Brokerage and Technology sectors. Top individual performers on the day included Realogy (RLGY), Re/Max (RMAX), Radian (RDN), and Invitation Homes (INVH).

The strong week for housing data continued with better-than-expected existing home sales data. While homebuilder earnings results and most other forward-looking metrics have indicated for some time that a housing market recovery is on tap for 2H19, the slower-reacting home sales data had been stubbornly slow to reflect these improved conditions. Well, patience is a virtue, as the pickup in single-family housing market activity is finally being reflected in the sales data. Existing home sales data beat estimates, recording its second straight year-over-year increase in sales following nearly a year-and-a-half of year-over-year declines. Existing sales rose by a seasonally-adjusted annualized rate of 2.6% from last year.

With gains of 25% so far this year, the broad-based REIT ETFs (VNQ and IYR) continue to outperform the S&P 500, which has climbed roughly 20%. The US Housing sector has climbed roughly 27% this year led by the 49% surge in Homebuilders (ITB) and strong gains from the Home Furnishings and Homebuilding Products & Materials sectors. At 1.77%, the 10-year yield has retreated by 91 basis points since the start of the year and is roughly 145 basis points below peak levels of 2018 around 3.25%.

For an in-depth analysis of all real estate sectors, be sure to check out all of our quarterly reports: Apartments, Homebuilders, Student Housing, Single-Family Rentals, Manufactured Housing, Cell Towers, Healthcare, Industrial, Data Center, Malls, Net Lease, Shopping Centers, Hotels, Office, Storage, Timber, and Real Estate Crowdfunding.

Disclosure: An investor cannot invest directly in an index and index performance does not reflect the deduction of any fees, expenses or taxes. The information presented does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate. We consider the information in this presentation to be accurate, but we do not represent that it is complete. It should not be relied upon as the sole source of suitability for investment. Please consult with your investment, tax or legal adviser regarding your individual circumstances before investing. Visit our website for a complete definition of all indexes cited in this report. Investing involves risk and loss of principal is possible.

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Hoya Capital Real Estate ("Hoya Capital") is an SEC-registered investment advisory firm that provides investment management services to ETFs, individuals, and institutions, focusing on portfolio and index management of publicly traded securities in the real estate industry. It is not possible to invest directly in an index. Index performance cited in this website or commentary does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate. Nothing on this site nor any published commentary by Hoya Capital is intended to be investment, tax, or legal advice or an offer to buy or sell securities. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and should not be considered a complete discussion of all factors and risks. Data quoted represents past performance, which is no guarantee of future results. Investing involves risk. Loss of principal is possible. Investments in companies involved in the real estate and housing industries involve unique risks, as do investments in ETFs, mutual funds, and other securities. Hoya Capital has no business relationship with any company discussed/mentioned. Hoya Capital never receives compensation from any company discussed/mentioned. Hoya Capital, its affiliate, and/or its clients and/or its employees may hold positions in securities or funds discussed on this website and our published commentary. A complete list of holdings and other important disclosures and definitions are available by clicking the links below.

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