According to Nareit, REITs experienced their third consecutive month of positive returns in July. The FTSE Nareit All Equity REITs Index had its strongest monthly performance of the year, with a total return of 7.2%. This outperformed broader markets such as the Dow Jones U.S. Total Stock Market and Russell 1000, which rose by only 1.8% and 1.5%, respectively.
In addition, the yield on the 10-Year Treasury decreased by 32 basis points in July to end at a rate of 4.05%. The dividend yield for both the FTSE Nareit All Equity REITs Index (3.86%) and Mortgage REITs Index (11 .97%) were significantly higher than that of S&P’s index (1 .27%).
Since October of last year when interest rates hit a high point at around four percent, there has been significant growth in various indices including an increase by approximately thirty percent for both Dow Jones U.S.Total Stock Market and Russell1000 indices since then.
Nareit’s John Barwick noted that while it is uncertain when exactly interest rates will be cut by Federal Reserve officials; many investors are anticipating this change to occur sometime during September due to inflationary measures approaching target ranges set forth by central bank policies.
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