Manufactured Housing REITs: Beat, Raise, Repeat
Perhaps, the biggest beneficiaries of the mounting housing shortage, the Manufactured Housing REIT sector, has continued their stellar run into 2019. The already sector-leading fundamentals have improved further this year.
Surging nearly 30% so far this year, the manufactured housing REIT sector is on pace to outperform the REIT index for a remarkable seventh straight year.
As the most affordable non-subsidized housing option in most markets manufactured housing demand has benefited from the long-awaited acceleration in wage growth among blue-collar workers.
Beyond the sector-leading internal growth, external growth through acquisitions and site expansions provide an added boost. While competition has heated up, these REITs command a superior cost of capital.
Home sales of manufactured housing and RV units, however, were not immune to the broader housing market slowdown last year. The magnitude of the dip in sales raises some concern.