Published on 23 Sep 2022 on Zacks via Yahoo Finance

3 Top Stocks From a Prosperous Residential REIT Industry

The REIT And Equity Trust - Residential constituents are expected to benefit from the healthy fundamentals of this industry. Rental housing demand remains robust, with young adults forming new households and the job market showing improvement. De-densification and the desire for more space is leading to fewer adults per apartment, thereby creating incremental demand for renting units. Moreover, mortgage rates are high, and with the high cost of homeownership, transition from renter to homeowner is difficult, making renting of apartment units a viable option.While product absorption continues in the Sun Belt and other non-gateway metros, the gateway metros are also showcasing a strong rebound. Therefore, residential REITs like Equity Residential EQR, Independence Realty Trust, Inc. IRT and BRT Apartments Corp. BRT are expected to ride the growth curve, despite interest rate hike, elevated deliveries and regulation woes.

About the Industry

The Zacks REIT And Equity Trust - Residential category is engaged in owning, developing and managing a variety of residences. The types of residences include apartment buildings, student housing, manufactured homes and single-family homes. Residential REITs rent spaces in these properties to tenants and earn rental income in return. Markedly, some residential REITs also focus on specific classes or types of residences, or a particular geographical region. Moreover, unlike apartment buildings, manufactured homes and single-family homes that are open for leasing to all, the student housing units are leased only to students. Such real estates are, therefore, generally required to be set up within or in places closer to colleges and universities. Furthermore, enrolment growth of educational institutes is a major driver of student housing assets.