I was surprised that last week's positive jobs report hit REITs so hard with many down 5% to 10%. Ostensibly that drop is because people assume the jobs report will encourage the Fed to raise rates, in which case mortgage rates will also rise.
My surprise is because 1) I figured a rate increase had already been baked in, and 2) a positive jobs report suggests increasing demand for housing. As many of us saw during the '80s, housing demand can be strong despite mortgage rates approaching 20%. What other factors might explain the hit that REITs took recently?
My surprise is because 1) I figured a rate increase had already been baked in, and 2) a positive jobs report suggests increasing demand for housing. As many of us saw during the '80s, housing demand can be strong despite mortgage rates approaching 20%. What other factors might explain the hit that REITs took recently?