Real estate investment trust prices are showing pleasure again on the expectation that the Fed will soon (1st quarter, 2024?) be lowering interest rates. Treasury yields are already dropping with the 30-Year back to 4.44% after hitting a remarkable 5% in October. It’s all good “expected” news for rate-sensitive sectors.
REITs definitely fit that category as lower rates would mean lowered costs among lenders and that brings in more buyers. They’ve been rallying strongly off of their October lows as the benchmark Real Estate Select Sector SPDR Fund clearly shows on this daily price chart:
The move from the $32 low of late October to the December 1st high of $38 represents a gain of about 16% in little more than one month.
The main takeaway, from a price chart analysis point of view, is that it now trades above both its 50-day moving average (the blue line) and, suddenly, its 200-day moving average (the red line.
This is an NYSE-traded ETF that consists of 31 real estate investment trusts, a means of buying into sector diversification.
4 REITs Up To New Highs:
Chicago Atlantic Real Estate Finance is a Nasdaq-traded mortgage REIT with a market capitalization of just $248 million. Average daily volume is a mere 81,000 shares. The daily price chart looks like this:
After dropping to $11.80 late in May, Chicago Atlantic now trades at $15.66, an up move from that low to the present high of 25%. You can see that the 50-day moving average crossed above the 200-day moving average in early June and that the price now trades above both measures.
This one hit a late October low of just below $680 and has rallied to a new high of $824 for a 17 1/2% gain from then until now. You can see by the red-dotted line how the previous resistance level, from July at $812, is history. The REIT trades well above both of the significant moving averages.
Rithm Capital is an NYSE-listed mortgage REIT with a market capitalization of $5.10 billion and which is paying a dividend of 9.47%. It trades at 86% of book value with a price-earnings ratio of 7.27. The daily price chart is here:
Those who had the wisdom to purchase shares in late March at $6.80 and hold until this week’s $10.56 have a profit of 36%. Note that the 50-day moving average crossed above the 200-day moving average in June and that the price continues to trade above both of them.
RPT Realty invests primarily in open-air shopping centers and trades on the New York Stock Exchange with a market cap of $969 million. Investors are paid a 4.52% dividend. The daily price chart looks like this:
That’s a move from $8.50 in late March to the $12.09 on Friday for an almost 30% gain from the low to the present. You can see that the 50-day moving average crossed above the 200-day moving average in early July. RPT Realty’s price continues to trade well above both averages.