WS #14758
A structural shift in the US housing market has occurred as the 10-year Treasury yield has risen above the single-family rental cap rate for the first time in 20 years, compressing real estate investment returns. Despite this, the broader bond selloff has slowed, with yields ticking higher rather than spiking. This environment is bearish for REITs and growth stocks sensitive to discount rates, but supportive of financials that benefit from higher net interest margins.
Macro Rate & Real Estate Shift
A structural shift in the US housing market has occurred as the 10-year Treasury yield has risen above the single-family rental cap rate for the first time in 20 years, compressing real estate investment returns. Despite this, the broader bond selloff has slowed, with yields ticking higher rather than spiking. This environment is bearish for REITs and growth stocks sensitive to discount rates, but supportive of financials that benefit from higher net interest margins.