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  • Alex Pettee, CFA

Manufactured Housing: Great REITs Are Never Cheap

  • Riding the tailwinds of the affordable housing shortage across the United States, manufactured housing REITs outperformed the REIT index for a remarkable eighth-straight year in 2020.

  • Pressured by the 'REIT Reopening Rotation,' however, MH REITs have uncharacteristically underperformed in early 2021 even as fundamentals remain stellar and all three REITs have already increased their dividends.

  • "Work From Anywhere" trends have powered a surge in RV, boat, and second-home sales which have provided an added external growth tailwind while same-store "organic" growth metrics remain impressive.

  • A traditionally countercyclical sector, MH REITs have historically been one of the most interest-rate-sensitive REIT sectors. Continued diversification into RV parks and boat marinas should provide a procyclical counterbalance.

  • Stellar fundamentals don't come cheap, but valuations are as attractive as they've been in a half-decade relative to other REIT sectors. Housing should be a bright spot in the REIT sector in 2021.

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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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