Real estate stocks start one of the worst months for equities on a strong note

Real estate stocks began September, a month considered one of the worst for U.S. equities, on a strong note, even as the major market averages slumped during the “brutal week”.

The S&P 500 plunged 4.25% for the holiday-shortened week to end at 5,408.42 points, posting its worst weekly performance since early March 2023.

“September is widely known as the worst month for U.S. equities, and risk assets followed the script with large sell-offs across the board,” said Augustine Fan, Head of Insights, SOFA.org.

Nine of the 11 S&P 500 sectors ended in the red, but The Real Estate Select Sector SPDR Fund ETF (NYSEARCA:XLRE) gained 0.18% from last week to close at 43.63.

A softer-than-expected jobs growth in August and significant downward revisions to the figures for June and July fanned growth worries, and also sparked a debate among experts as to what should be the size of the expected Federal Reserve interest rate cut later this month.

FTSE Nareit All Equity REITs (INDEXFTSE: FNER) increased 0.30%, while Dow Jones REIT Indx Equity REIT Total Return Index (NASDAQ:REIT:IND) fell only marginally by 0.04% from last week.

Sector News

• Retail and other areas of the commercial real estate market saw fundamentals firming in Q2, aided by solid spending by consumers, Wells Fargo said.
• Long-term mortgage rates were unchanged from last week, and while home sales have been lackluster, refinancing activities gained traction, according to the Freddie Mac Primary Mortgage Survey.
• Shelter inflation has been slowing down in recent months, and is projected to continue to decline over the next few months, according to a research report by the Federal Reserve Bank of San Francisco.

Notable Movers

Wheeler Real Estate Investment Trust (WHLR) and Avalon GloboCare (ALBT) were the notable real estate gainers of the week.

Specialized REITs American Tower (AMT), SBA Communications (SBAC) and Crown Castle (CCI) were the top-performing S&P 500 real estate stocks. Hotel & Resort REIT Host Hotels & Resorts (HST) was the worst performer.

Here is a look at the subsector performances for the week: