XLRE - Real Estate ETFs are on the radar after the latest round of mortgage data

2023-07-06 09:20:59 ET

The real estate sector of the S&P 500 was put under the microscope on Thursday morning after the latest round of mortgage data showed that mortgage applications had dropped and mortgage rates had climbed.

Mortgage applications declined 4.4% for the week that ended on June 30th, which marked the first decline in four weeks. The last time applications fell this much was in mid-May, when there was a decline of 4.6%.

At the same time, 30-year mortgage rates also jumped 10 basis points from the previous week's reading to 6.85%, which also marks the highest level since mid-May, when rates sat at 6.91%.

With mortgage data hitting the market, many investors have turned towards housing and broad-spectrum real estate exchange traded funds. See below a group of funds along with their 2023 returns:

• The Hoya Capital Housing ETF ( NYSEARCA: HOMZ ) +20.5% .
• iShares U.S. Home Construction ETF ( ITB ) +36.8% .
• SPDR S&P Homebuilders ETF ( XHB ) +29.7% .
• iShares Residential and Multisector Real Estate ETF ( REZ ) +8.3% .
• iShares Mortgage Real Estate Capped ETF ( REM ) +0.3% .
• Real Estate Select Sector SPDR Fund ( NYSEARCA: XLRE ) +3% .
• Vanguard Real Estate ETF ( NYSEARCA: VNQ ) +2.4% .
• iShares U.S. Real Estate ETF ( NYSEARCA: IYR ) +3.8% .

More on Markets:

• Treasury yields spike; US2Y jumped above 5% and the US10Y climbed above 4%
• Vanguard says inflation will remain sticky and a recession can be pushed out to 2024
• AllianceBernstein doesn’t see a hard landing and says Q3 may struggle to find a direction

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