Daily Recap: REITs Lower | Housing Stocks Higher | Busy Earnings Continue
Coming off a 0.7% gain yesterday, US equity markets gave back some recent gains as earnings season kicked into high gear. The S&P 500 ETF (SPY) declined 0.4% on the day, still within 1.5% of record-highs while the Nasdaq ETF (QQQ) dipped 0.8%, also within 2% of new all-time records. The 10-Year yield declined by 2 basis points to end the day at 1.77%, still towards the higher-end of its 3-month range. Real estate equities were generally lower on the day with the broad-based REIT ETF (VNQ) ending the day lower by 0.2%, led to the upside by the student housing, mall, and timber REIT sectors while the single-family rental, storage, and manfuactured housing sectors lagged.
The Hoya Capital Housing Index, the benchmark that tracks the performance of the US housing industry, finished the day at another new closing high, gaining 0.3%, led by the Home Furnishings, Homebuilding Products, and Home Improvement retail sectors. Gains today came despite a headline miss on Existing Home Sales data, which we analyze below. Top individual performers on the day included Bed Bath & Beyond (BBBY), Aarons (AAN). Realogy (RLGY), Louisiana-Pacific (LPX), and At Home Group (HOME).
Yesterday afternoon, we saw earnings results from American Campus (ACC) - which ended higher in today's session - and Equity Lifestyle (ELS) - which was among the underperformers. This morning, we saw earnings results from homebuilder Pulte Group (PHM) which beat estimates as the company reported a 13% surge in net new orders and an 11% increase in new order value. This afternoon, we see results from Equity Residential (EQR), Highwoods (HIW), and PS Business Park (PSB). We'll have full coverage of earnings season on the iREIT on Alpha Marketplace. Below we compiled the notable earnings that we’re watching across the residential and commercial real estate sectors, which we will update throughout earnings season in our Real Estate Weekly Review.
Existing Home Sales missed estimates in September, declining by 2.2% from the prior month to a seasonally adjusted rate of 5.38 million. Despite the monthly decline, sales are higher by 3.9% on a year-over-year basis, the strongest rate of growth since early 2017 and comparables get increasingly easier over the next six months. August's rate of sales, meanwhile, was revised higher to 5.50 million from 5.49 million. On a trailing twelve-month basis, existing home sales remain lower by roughly 4%, but as shown in the chart below, the faster-responding seasonally-adjusted rate has shown significant reacceleration over the last six months.
The busy week of housing data rolls on with the FHFA Home Price Index released tomorrow and New Home Sales data released on Thursday, in addition to a flurry off PMI and manufacturing data later in the week. New Home Sales is coming off the best month in more than 12 years and expectations call for the second straight month of 700k or more units sold.
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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