• Alex Pettee, CFA

Real Estate Daily Recap: REITs & Housing Climbs as S&P 500 Hits New Record

Bouncing back from a down-day on Monday, the Hoya Capital US REIT Index finished the day higher by 1.3%, led by the hotel, shopping center, and industrial REIT sectors. The data center REIT sector was the lone sector in negative territory for the day. The S&P 500 finished the day higher by 0.9% and finished at a new record high. The Nasdaq finished higher by 1.3%, also a new record high. At 2.57%, the 10-Year Yield finished the day lower by 2 basis points on the day. Oil finished another 1% higher as the continued climb higher in energy prices threaten to derail the 'Goldilocks' economic conditions that had powered real estate outperformance since late 2018.

The Hoya Capital US Housing Index finished the day higher by 1.3% with all eight sectors in positive territory. The Homebuilding and Technology & Brokerage sectors were the strongest performers, led by strong gains from Watsco (WSO), Pulte (PHM), Re/Max (RMAX), KB Home (KBH), and Meritage (MTH).

The Home Improvement Retail and Mortgage Lenders/Services sectors were the relative underperforms on the day. NVR (NVR), Lennox (LII), Eagle Materials (EXP), Bed Bath & Beyond (BBBY), and Overstock (OSTK) were the laggards.

New Home Sales data, released this morning, came in above consensus estimates.. Sales increased 4.5% from last month to a seasonally adjusted annual rate of 692,000 units, the highest level since November 2017. On a TTM basis, new home sales are higher by 0.2% over the last year. Existing home sales data, released this morning, was weaker than estimated as the lingering effects of the 2018 softness carry into this year. Per the NAR, existing sales came in at 5.21 million, below the 5.31 consensus estimates. This represents a 5.4% decrease from the same month last year.

It'll be one of the jam-packed days for real estate and housing earnings tomorrow. Per Seeking Alpha, the slate includes Essex Properties (ESS), Avalonbay (AVB), Corelogic (CLGX), Coresite (COR), and Sun Communities (SUI).

The economic calendar for the rest of the week includes Durable Goods data on Thursday and GDP data on Friday.

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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