3 Real Estate Stocks to Buy as Mortgage Rates Continue to Rise

Mortgage rates have resumed their climb after declining a bit since the announcement of rate cuts. As of Dec. 29, the 30-year fixed mortgage rate is 6.99%, increasing slightly from last week. The Fed's decision to lower interest rates has not translated into immediate reductions in mortgage rates. In fact, mortgage rates in the United States have started to shift upward again.This upward trend in rates can be linked to long-term bond yields and renewed investor interest. Specifically, the 10-year Treasury is seen as the biggest influence on mortgage rates, and yields for the 10-year have increased in recent weeks. The benchmark yield rose again on Friday, hovering near a seven-month high. It rose 4 basis points higher to 4.626%.This northward movement of mortgage rates defies conventional wisdom, as bond yields typically decrease as the Fed-determined federal funds rate does.  However, lower mortgage rates were prevalent even before the Fed started cutting rates. This is because long-term bond yields are also guided by the anticipation of multiple rounds of cuts to the short-term Fed funds rate, a possible six to eight cuts from September to deep into 2025. Now that the Fed’s December meet has indicated only a couple of cuts in 2025, all eyes will be on the mortgage rates’ reaction to it.While elevated mortgage rates in recent weeks seem have reduced affordability, with rates coming down, there might be better times ahead for home buyers. A higher inventory of homes would bring prices further down, luring first-time buyers. One must, thus, start considering parking part of their investments in promising stocks in the sector.Our PicksWe have narrowed our search to three real estate or related stocks that have good potential. These stocks have seen positive earnings estimate revisions in the past 60 days. Our picks carry either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.CBRE Group, Inc. CBRE is a real estate services and investment company.CBRE has an expected earnings growth rate of 30% for the current year. The Zacks Consensus Estimate for its current-year earnings has improved 2.5% over the past 60 days. CBRE currently holds a Zacks Rank #2.ARMOUR Residential REIT, Inc. ARR engages in the business of investing in residential mortgage-backed securities.ARR has an expected earnings growth rate of 5.3% for the next year. The Zacks Consensus Estimate for its current-year earnings has improved 1.3% over the past 60 days. ARR currently carries a Zacks Rank #2.TPG RE Finance Trust, Inc. TRTX is a real estate finance company.TRTX has an expected earnings growth rate of 133.5% for the current year. The Zacks Consensus Estimate for its current-year earnings has improved 1.8% over the past 60 days. TRTX currently sports a Zacks Rank #1.Zacks Naming Top 10 Stocks for 2025Want to be tipped off early to our 10 top picks for the entirety of 2025?History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2025. Don’t miss your chance to get in on these stocks when they’re released on January 2.Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ARMOUR Residential REIT, Inc. (ARR): Free Stock Analysis Report TPG RE Finance Trust, Inc. (TRTX): Free Stock Analysis Report CBRE Group, Inc. (CBRE): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks