Real estate weekly_ record high home prices and consumer confidence, reit rally pauses _ seeking alpha

REIT valuations through most of the past three years have been driven almost entirely by movements in US interest rates, but this pattern has diverged slightly since the Trump election. Data recovery on mac REITs have held up surprisingly well in the face of sharply higher interest rates. Data recovery kali linux Until this past week, rising inflation expectations explained the majority of the movement in nominal yields, as real yields had only moderately increased. I card data recovery This past week, though, saw a reversal.


Database name Real yields increased as inflation expectations fell on cooler than expected PCE and consumer inflation expectations. Database quiz As real estate has inflation-hedging properties, investors should be more focused on real yields than on nominal yields.

The REIT/Rate correlation that dominated movements in REIT shares over the past year faded in recent weeks, but has returned with a vengeance these past two weeks. Database url Rolling 20-day correlations between REITs and the 10-Year Treasury are at the highest levels of all-time, a dramatic reversal in recent weeks. Os x data recovery free We believe much of the “rates up, REITs down” correlation is fueled by an incorrect media-driven narrative that gets amplified when interest rates and the Fed are in focus. Fda 510 k database That said, as we continually highlight, many individual REITs are indeed very bond-like, but the real estate sector as a whole has historically exhibited only limited interest rate sensitivity in past cycles.

Last week, the Fed signaled that it projects three rate hikes in 2017, slightly higher than the two they saw during their last meeting. Database research The odds of a March rate hike increased from 21% to 25% this week.

Data center REITs continued a strong month led by Digital Realty (NYSE: DLR), Coresite (NYSE: COR) and Dupont Fabros (NYSE: DFT). Graph database The data center sector is now up 10% this month. Data recovery android free We noted the upside potential last month in REIT Rankings: Data Center.

The Yield REIT sectors finally outperformed this week. Database software The net lease sector was led Verreit, (NYSE: VER), National Retail (NYSE: NNN), Realty Income (NYSE: O), and Store Capital (NYSE: STOR). Database software definition Healthcare also outperformed led by Omega (NYSE: OHI), Ventas (NYSE: VTR), Welltower (NYSE: HCN), and HCP (NYSE: HCP).

The mall sector was by far the worst performer this week, led to the downside by hints that this holiday season may be weaker than expected. Database error 7719 at exe General Growth (NYSE: GGP) declined by 6% while Simon (NYSE: SPG) declined by 3%. Data recovery nj Outlet mall Tanger (NYSE: SKT) was the best performing mall.

This was a busy week for real estate economic data. Iphone 6 data recovery mac New and existing home sales topped expectations, home prices continued to rise, mortgage rates stabilized, and housing affordability neared multi-decade lows. Database design tool Key macroeconomic themes this week include an upward revision to Q3 GDP, cooler than expected PCE inflation, and rising consumer confidence.

New Home Sales in November rose 5.2% MoM to an 592k annualized rate, beating expectations of a 2.1% rise. H data recovery software Existing home sales data was also impressive, recording a 0.7% MoM gain to an annualized rate of 5.61 million units, beating estimates of a 1% decline.

New home sales have trended up at a sluggish rate since the recession. 1 care data recovery software High construction costs, stifling local zoning regulations, and slow income growth have made it difficult for homebuilders to profitability construct new homes, especially for first-time buyers.

While new home sales are now right around their post-WW2 average, it’s important to keep in mind that the US population has nearly doubled in this time. Database user interface We adjust the new home sales data for the population growth below. Data recovery jaipur Clearly, the recovery in new home sales has a long way to go, but higher construction costs could further slow the recovery.

30-Year Mortgage rates, which tend to track movements in medium and long term Treasury bonds, finally stabilized this week after several weeks of relentless gains. Database platforms All else equal, higher mortgage rates put downward pressure on house prices and home sales, as it pushes marginal buyers out of the market.

The combination of higher home prices and higher mortgage rates is expected to make housing less affordable in 2017. Data recovery group We expect home price gains to slow as a result. Database xls Eventually, we expect home prices settle into an average growth rate of 2.5-4% per year, in line with nominal GDP growth, given expectations for roughly 2% real growth and 2% inflation over the coming decade.

The revisions to Q3 GDP topped estimates, recording a 3.5% annualized rate of growth, up from the 3.2% reported in the last revision. C database library Higher local government spending and higher nonresidential fixed investment was behind the upward revisions. 510 k database Corporate profits rose 6.7% after several quarters of weakness.

Real income and spending growth continue to be solid, but not spectacular. How to become a database administrator These measures have averaged about 3% growth since 2014. Database xml Inflation measures were slightly cooler than expected as PCE inflation is still several tenths below the 2% target.

Consumer Sentiment reached 98.2 in December’s first reading, the highest level since before the recession. Database terminology This is an 11-point increase since October of this year, one of the highest two month gains in confidence in history, spurred by the stunning Republican electoral landslide in the November elections. Database theory High consumer confidence typically correlates with strong retail spending.

The real estate economic data released this week was very solid, but we have not yet seen the full effects of higher mortgage rates. Database 1 to 1 relationship We expect home price gains to moderate slightly in 2017. Database testing Going forward, if supply and demand are at equilibrium on a national level, it is reasonable to expect average home prices to grow at a pace between the inflation rate (roughly 2%) and the nominal GDP growth rate (5%).

There is still significant policy uncertainty heading into the new administration. Database graph A significant overhaul of the tax code could potentially alter the economics of home ownership, but at this time, we expect any changes in this regard to be minimal. Database naming conventions A healthy US housing market, the largest asset class in the world, is critical for economic stability and growth.

This week, we continued our REIT Rankings. Database entity We have updated our research with the Healthcare, Net Lease, Data Centers, Apartments, Industrial, Mall, Self-Storage, and Student Housing sectors.

We encourage readers to follow our Seeking Alpha page (click ‘Follow’ at the top) as we continue to analyze the REIT and commercial real estate sectors.

I wrote this article myself, and it expresses my own opinions. Database developer I am not receiving compensation for it (other than from Seeking Alpha). Data recovery plan I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: All of our research is for educational purpose only, always provided free of charge exclusively on Seeking Alpha. Data recovery kansas city Recommendations and commentary are purely theoretical and not intended as investment advice. N k database Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. Data recovery 2016 For investment advice, consult your financial advisor.

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