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  • Alex Pettee, CFA

Inflation Worries Pressure REITs

  • U.S. equity markets retreated from all-time-highs this week as interest rates and inflation expectations jumped to mid-pandemic highs amid a Southern 'Deep Freeze' and a slate of strong economic data.

  • Declining on all four trading days this week, the S&P 500 retreated by 0.7% this week while the tech-heavy Nasdaq 100 dipped 1.6% amid a rotation out of many recent high-flyers.

  • Real estate equities were mixed this week despite a continuation of the wave of dividend boosts and solid earnings reports as the broad-based Equity REIT ETFs declined by roughly 1%.

  • REIT Rejuvenation? Five more equity REITs and three mortgage REITs boosted their dividends this week. We've now seen 26 REITs boost their dividends since the start of 2021 after 52 REITs raised in 2020.

  • The red-hot U.S. housing market has shown few signs of cooling in the winter months. Homebuilder Sentiment, Building Permits, and Existing Home Sales each topped expectations as builders are selling homes as fast as they can be built.

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Disclosure: A complete list of holdings and Real Estate and Housing Index definitions and holdings are available at HoyaCapital.com. Hoya Capital Real Estate advises an Exchange Traded Fund listed on the NYSE. Hoya Capital is long all components in the Hoya Capital Housing 100 Index.

Additional Disclosure: It is not possible to invest directly in an index. Index performance cited in this commentary does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate. Data quoted represents past performance, which is no guarantee of future results. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy.

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Hoya Capital Research & Index Innovations is an affiliated index provider and research firm that builds custom indexes tracking U.S. commercial and residential real estate sectors, including indexes tracked by exchange-traded funds (ETFs). 

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