VNQ - Prediction: This Will Be the Best-Performing Sector of the Second Half of 2024
2024-07-19 07:13:00 ET
The real estate sector has been one of the worst-performing parts of the stock market recently. Although the S&P 500 is up by 50% since the start of 2023, rebounding nicely from the 2022 bear market lows, the real estate sector, as indicated by the Vanguard Real Estate ETF (NYSEMKT: VNQ) , is up by just 6% in the same period. Even including dividends, real estate has underperformed the S&P 500 by 37 percentage points over the past year and a half.
While this has certainly not been a fun time to be a real estate investment trust (REIT) investor, there's good reason to believe that things are about to turn around. With that in mind, here's why real estate has performed so poorly as a sector, why things might be about to get better for REITs, and why now could be a great time to get some exposure.
The biggest reason real estate has underperformed is the rising-rate environment of the past couple years.
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Prediction: This Will Be the Best-Performing Sector of the Second Half of 2024