O - 2 No-Brainer Real Estate Stocks to Buy With $1000 Right Now
2024-07-19 06:37:00 ET
Rising interest rates are generally a negative catalyst for real estate stocks. Without getting too deep into an economics lesson, the general idea is that when risk-free interest rates (like Treasury securities) rise, yields of other income investments like real estate investment trusts, or REITs, tend to rise as well. Since price and yield have an inverse relationship, this puts pressure on REIT prices.
In fact, since the start of 2022, just before the current rate-hike cycle started, the real estate sector as a whole has generated a negative 15% total return, compared with a positive 24% from the S&P 500 in the same period. However, with rates largely expected to start falling later in 2024, the next few years could be a completely different story.
Both EPR Properties (NYSE: EPR) and Realty Income (NYSE: O) have moved higher recently as more investor attention has turned to dividend-paying stocks, but they are still trading for 48% and 30%, respectively, below their all-time highs set shortly before the COVID-19 pandemic hit. And now could be a great time for long-term investors to take a look at these excellent income stocks before interest rates start to fall.
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2 No-Brainer Real Estate Stocks to Buy With $1,000 Right Now