It's been a week of sector rotation as the most beaten-down names - not only within the real estate sector, but across the broader equity market - have shown renewed signs of life. The S&P 500 regained the 3,000 level, climbing 0.7% on the day while the small-cap Russell 2000 surged more than 2%. The broad-based REIT ETFs (VNQ and IYR) finished the day higher by 0.2%, led by the timber, manufactured housing, and student housing REIT sectors. Despite the surge from CBL, which we discuss in more detail below, the mall REIT sector was the laggard after two straight days of strong performance.

The Hoya Capital Housing Index jumped more than 1% on the day, setting a new all-time record high. The Home Furnishings and Homebuilders sector led the way on the day with particularly strong performance from Wayfair (W), Tempur Sealy (TPH), At Home (HOME), Restoration Hardware (RH), and Realogy (RLGY). JP Morgan (JPM) analysts upgraded PulteGroup (PHM) and noted that "some modest remaining upside potential" remains for the homebuilders despite their 42% surge so far this year.

The talk of the REIT world continues to be on small cap REIT CBL & Associates (CBL), which surged more than 30% today despite news that mall-based retailer Forever 21 plans to file bankruptcy as early as Sunday. In what some observers have described as a "dash for trash," the beaten-down mall REIT has gained more than 90% over the last four weeks after the company received notification from the NYSE that as of Aug. 19, it's no longer in compliance with listing criteria. Fellow mall REITs Washington Prime (WPG) and Pennsylvania REIT gained 6.2% and 3.6% on the day, respectively.

With gains of more than 23% so far this year, the broad-based REIT ETFs (VNQ and IYR) continue to outperform the S&P 500, which has climbed roughly 20%. The US Housing sector has climbed 27% this year led by the 44% surge in Homebuilders (ITB). At 1.73%, the 10-year yield has retreated by 95 basis points since the start of the year and is roughly 150 basis points below peak levels of 2018 around 3.25%.

If you enjoyed this report, be sure to "Follow" our page to stay up-to-date on the latest developments in the housing and commercial real estate sectors. For an in-depth analysis of all real estate sectors, be sure to check out all of our quarterly reports: Apartments, Homebuilders, Student Housing, Single-Family Rentals, Manufactured Housing, Cell Towers, Healthcare, Industrial, Data Center, Malls, Net Lease, Shopping Centers, Hotels, Office, Storage, Timber, and Real Estate Crowdfunding.

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