Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.

Can I get similar returns by buying mortgage-backed securities, home builder stocks or other rental properties?

0
Posted

Can I get similar returns by buying mortgage-backed securities, home builder stocks or other rental properties?

0

None of these other investments have the same return patterns (absolute return, correlation with other asset classes, and volatility) as single-family housing. Mortgage-backed securities provide debt returns, not equity returns. Home builders primarily provide exposure to development and manufacturing-type risks. Multi-family funds are the most closely related asset class, but long-term data shows a different return pattern. Measured against the NCREIF apartment index since 1978, single-family housing has had higher returns, experienced lower volatility, and been far less correlated with equities. What is the impact of changes in inflation and interest rates on returns?Single-family housing is likely to benefit from an increase in inflationary expectations—residential real estate is a very strong inflation hedge. Of course, higher inflation is typically accompanied by an increase in interest rates, but a growth in property prices would likely offset any increase in borrowing costs driv

Related Questions

Thanksgiving questions

*Sadly, we had to bring back ads too. Hopefully more targeted.