New York, January 11, 2026, 13:41 EST — Market closed.
- A fresh U.S. mortgage-bond purchase program has reignited interest in rate-sensitive real estate stocks
- REIT-focused ETFs closed Friday with modest gains, but housing-related stocks saw a sharper rally
- Tuesday’s CPI report will be the next key trigger for movements in rates and real estate values
U.S. real estate stocks enter the week as the Trump administration’s mortgage-bond strategy takes shape. Treasury Secretary Scott Bessent said the aim is to “roughly match” the Federal Reserve’s runoff of mortgage-backed securities. FHFA Director William Pulte has kicked off with a $3 billion purchase, according to Bessent, while the Fed is allowing about $15 billion a month to roll off. Meanwhile, 30-year mortgage rates are hovering near 6.2%. The Fed still holds just over $2 trillion in these securities. (Reuters)
Mortgage-backed securities, known as MBS, are bonds secured by home loans. When investors pay a premium for these bonds, their yields drop, which can lead to lower mortgage rates and potentially boost demand in the housing market.
Rate-sensitive real estate investment trusts (REITs)—publicly traded firms owning or managing property—have returned to traders’ radar. The Real Estate Select Sector SPDR Fund (XLRE) follows S&P 500 real estate firms and REITs, excluding mortgage REITs, and typically tracks long-term rate expectations. (State Street Global Advisors)
XLRE ended Friday at $40.50, ticking up around 0.2%. Vanguard’s Real Estate ETF (VNQ) nudged higher as well, gaining about 0.2% to $89.47. The iShares U.S. Real Estate ETF (IYR) edged up roughly 0.1%, closing at $94.74.
President Donald Trump directed $200 billion in mortgage-bond purchases aimed at lowering housing costs. Pulte said Fannie Mae and Freddie Mac would carry out the initiative. Speaking to Reuters, Pulte noted the agencies have “ample liquidity” beyond the cash listed on their balance sheets. Redfin economist Chen Zhao estimated the move would trim mortgage rates by roughly 10 to 15 basis points, or a few hundredths of a percentage point. (Reuters)
Friday’s standout action came in housing and mortgage-linked stocks, not so much in REIT-heavy funds: the Philadelphia Housing index soared 4.8%, while the MSCI U.S. REIT index eked out a 0.6% gain. Consumer lender loanDepot surged 24%, Rocket Companies added 6.6%, and homebuilders Lennar and D.R. Horton rose 7.5% and 6%, respectively. TD Cowen suggested this rally could tighten the spread between the 30-year mortgage rate and the 10-year Treasury yield. Brian Jacobsen of Annex Wealth Management described the surge as “self-defeating” if demand outpaces supply. Jefferies projects mortgage rates need to fall to the mid- to high-5% range from around 6.2% to boost affordability. (Reuters)
Macro data weighed on the close. The Labor Department said unemployment dropped to 4.4% in December, with payrolls up 50,000. Rate futures moved toward a longer Fed pause, with traders now eyeing June for the next cut. (Reuters)
This trade can unravel fast. Should inflation pick up again, Treasury yields could rise, dragging real estate stocks down regardless of policy moves. Plus, if lower rates just boost demand without increasing supply, affordability might not get much better.
Tuesday brings the U.S. Consumer Price Index for December, set for release at 8:30 a.m. ET on January 13. Producer prices drop the next day, January 14. As the new week kicks off, investors will also watch closely for clues on how mortgage-bond buying might proceed. (Bureau of Labor Statistics)
