In this article, we will take a look at the 12 best real estate and realty stocks to buy now.
Real Estate So Far in 2025
As the US housing market headed into 2025, it witnessed good as well as bad news. Although the supply has increased with active listings in November 12.1% higher over the year, Redfin revealed that the majority of those homes had been on the market for at least 60 days without going under a sales contract, marking the highest share for any November since the year 2019.
While mortgage rates have averaged over 6% for the past 24 months, home buyers are not expecting mortgage rates to decline substantially. As the year ended, a rise in mortgage interest rates toward the end of December ended up impacting the mortgage demand. According to the Mortgage Bankers Association’s seasonally adjusted index, total mortgage application volume for the two weeks ended December 27 declined 21.9% as compared with the week before that period. Mike Fratantoni, chief economist at the Mortgage Bankers Association, reiterated the bitter impact of the mortgage rates moving higher through the last week of 2024 as he said:
“Not surprisingly, this increase in rates — at a time when housing activity typically grinds to a halt — resulted in declines in both refinance and purchase applications.”
Bess Freedman, Brown Harris Stevens CEO, pointed towards a troubling trifactor encompassing rates, inventory, and prices for this year. She expects the new year to be turbulent and volatile for the real estate although the public does have certainty with the president now which is good. Bess also talked about the US demographics and how first-time home buyers are older than ever, nearing 40s which is a bad sign indicating young people not being able to afford. While the situation around Trump’s tariffs and rates potentially going up remains unclear as of yet, homeownership continues to be an American dream in her opinion.
With that being said, let’s move to the 12 best real estate and realty stocks to buy now.
Our Methodology:
In order to compile a list of the 12 best real estate and realty stocks to buy now, we first use a stock screener to make an extended list of the relevant companies with the highest market caps. Moving on, we shortlisted the top 12 stocks from our list which had the highest number of hedge fund holders. The 12 best real estate and realty stocks to buy now have been arranged in ascending order of their hedge fund holders as of Q3.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
12 Best Real Estate and Realty Stocks To Buy Now
12. Extra Space Storage Inc. (NYSE:EXR)
Number of Hedge Fund Holders: 28
Extra Space Storage Inc. (NYSE:EXR) is a fully integrated, self-administered, and self-managed real estate investment trust headquartered in Salt Lake City. The company owned and/or operated 3,862 self-storage stores in 42 states and Washington, D.C., as of September 30, 2024. Customers can select from a variety of conveniently located and secure storage units across the US including boat storage, RV storage, and business storage.
Extra Space Storage Inc. (NYSE:EXR) has the privilege of being the largest operator of self-storage properties in the United States. The company focuses on storage which is a need-based, recession-resilient asset class with rising utilization, awareness, length of customer stay, and demand drivers in positive and negative economic environments. The shareholder returns potential remains strong with storage having the highest cumulative total return of any real estate sector since 1999.
The REIT is well positioned in a highly fragmented sector with a solid balance sheet, strong operational efficiency, robust occupancy gains, massive scale, and disciplined growth through accretive acquisitions and strong partnerships. Jefferies analyst Jonathan Petersen recently maintained its Buy rating on the stock as the firm remains cautiously positive on the self-storage sector into 2025. While investors were advised not to rush buying EXR shares ahead of the upcoming quarter with the initial outlooks expected to be conservative, a housing market recovery in 2025 would potentially lead to increased demand for self-storage and drive upward adjustments to guidance and estimates.
11. Public Storage (NYSE:PSA)
Number of Hedge Fund Holders: 28
Public Storage (NYSE:PSA) is an owner, operator, and developer of self-storage facilities. The company opened its first self-storage facility in 1972 and has become the largest owner and operator of self-storage facilities in the world. It also serves as one of the biggest landlords across the world with more than 170 million net rentable square feet of real estate.
Public Storage (NYSE:PSA) has maintained a leadership position in the self-storage industry for almost half a century. The firm boasted industry-leading cash flow generation, the strongest operating metrics, and the lowest leverage, as of September 30, 2024. An unmatched owned scale and locations are a distinct competitive advantage for the self-storage leader with half of the U.S. population residing within a Public Storage trade area.
The iconic brand pursues a superior growth strategy and has achieved significant growth over the years. Since the beginning of 2019, the firm’s portfolio size has expanded by 36% through $12 billion of investment and an addition of 59 million square feet. High-growth lease-up properties account for 23% of the total portfolio and continue to grow.
