Housing Construction 'Boom' Ends, Data Shows: How Are Real Estate Stocks Reacting?
Portfolio Pulse from Aaron Bry
The boom in housing construction driven by low-interest rates during the COVID-19 pandemic has ended due to higher rates, with the number of new building permits for multi-unit residential buildings dropping to a three-year low in September. Real estate stocks have not participated in 2023’s broad-market rally, with the Real Estate Select Sector SPDR Fund (NYSE:XLRE) down 8% year-to-date and Prologis Inc (NYSE:PLD) down about 6% YTD.
October 18, 2023 | 8:03 pm
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NEGATIVE IMPACT
Prologis Inc (NYSE:PLD), the largest publicly-traded REIT, is down about 6% YTD.
Prologis Inc (PLD) has been negatively impacted by the end of the housing construction boom and higher interest rates, reflected in its approximately 6% YTD decline.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
The Real Estate Select Sector SPDR Fund (NYSE:XLRE) is down 8% year-to-date, not participating in the broad-market rally of 2023.
The end of the housing construction boom and higher interest rates have negatively impacted the real estate sector, including XLRE. This is reflected in its 8% YTD decline.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100