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Investors aren’t considering real estate stocks as the best investment right now because the Fed hasn’t cut interest rates yet and soaring prices and high mortgage rates continue to make homebuyers nervous. Of course. In fact, the general sentiment towards real estate today appears to be even more negative than it has been in years past. However, there are still some surprisingly lucrative options available in this area.
Traditional real estate may not be thriving right now, but some real estate stocks are still delivering impressive gains. Here are his three interesting strategies that may prove fruitful even as other markets lag behind.
A stock in the real estate market: Lennar (LEN)
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lenner (New York Stock Exchange:Len) is one of the largest home builders in the United States. DR Horton (New York Stock Exchange:DHI). In 2023, the stock prices of both companies fell amid interest rate uncertainty. But while both have recovered since the beginning of 2024, Renner has fared much better. LEN stock is up 12% since the beginning of the year, while DHI stock is up just 5%.
The key to Lennar’s continued success lies in current home sales trends. Many homeowners who bought before 2023 are choosing not to sell thanks to historically low mortgage rates. Therefore, new construction becomes one of the only options for new home buyers.
Lennar operates in 75 markets in 26 states, and for the past several years has generated total revenues far greater than the third-largest construction company in the United States. pluto group (New York Stock Exchange:PHM). The company is not the largest construction company, so there is room for growth. However, it is far from the smallest size and provides great stability in the current market.
On TipRanks, 11 out of 17 analysts rate the LEN stock as a buy. compared to Vanguard Real Estate ETF (NYSEARCA:VNQ), Lennar outperformed the overall real estate sector by more than 50% over the past 12 months. In its latest earnings report, the company’s EPS also exceeded analyst estimates by 36 cents, or 16%.
The real estate market may be volatile right now, but Lennar remains one of the best performing real estate stocks.
Well Tower (WELL)
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well tower (New York Stock Exchange:good) is a real estate investment trust (REIT) has made significant investments in senior living facilities in the United States, Canada, and the United Kingdom. Given that the population in the United States alone is rapidly aging and may require specialized assistance and living facilities in the coming years, here’s why Well stock is a good choice among real estate stocks. I understand.
According to the report, the number of people aged 65 and older in the United States is expected to “reach approximately 80.8 million.” […] By 2040, that number will be more than double what it was in 2000. ” As a result, demand for lifestyle support is expected to continue to increase. Companies that provide places for seniors to live, whether in independent living environments or assisted living facilities, stand to benefit from this demographic shift.
Of the 14 analysts covering Well’s stock, 9 rate it a buy and 5 rate it a hold. WELL also appears to have healthy upside potential compared to its peers, with his average price target of $100.07 per share. Finally, Welltower’s fourth quarter results exceeded expectations for both revenue and operating cash (FFO) is higher than expected. The company also continues to expand through a recent agreement to purchase a portfolio of 25 “age-restricted active adult communities” for $969 million.
Builders First Source (BLDR)
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As new housing starts increase, companies that supply materials to home builders also tend to benefit.Therefore, it is natural that Builder’s First Source (New York Stock Exchange:BLDR) (the largest building materials supplier in the US) is a safe choice among real estate stocks. As mentioned earlier, new home builders have been surprising winners in the real estate market. As suppliers continue to grow, we expect them to continue to do well as well.
The recent collapse of the Francis Scott Key Bridge in Baltimore, Maryland, and the closure of major ports could make imports difficult and raise the price of certain goods.according to CNBC, home depot (New York Stock Exchange:HD) is one of the major home improvement stores that may be affected by the closure. It remains to be seen whether this will hurt or benefit the bottom line of companies like Builders FirstSource, but it’s still something to consider.
year to date (YTD), BLDR stock is up over 20% in 2024, significantly higher than other stocks mentioned on this list. Additionally, over the past year, BLDR stock has risen nearly 140%.
9 out of 13 analysts on TipRanks rate the stock as a buy. The current 12-month forecast only suggests an upside of about 3%, but the building products market should continue to perform well regardless of what the Fed does. Overall, things look positive for BLDR stock, with several hedge funds and institutional investors also buying up the stock.
On the date of publication, Philippa Main did not have (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer and are influenced by InvestorPlace.com. Publishing guidelines.
Philippa Main is a real estate agent in Virginia and Florida who also does freelance writing, editing, business development and marketing. She leverages her extensive knowledge of the real estate market to make investment decisions in a variety of industries. She also has a special focus on educating women about finance and investing.
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