In this article, we will discuss the 12 best residential real estate stocks to buy according to analysts.
Residential Real Estate in 2025
As reported by CNBC, a troubling sign for the spring market is the homebuyer mortgage demand declining. While more listings are coming up for sale, home buyers are not really convinced to be a part of the spring housing market. The supply of homes for sale is up 25% as compared to the prior year, with the supply gain coming from homes sitting on the market for longer.
Redfin reveals that the average time to sell a home in the month of January was 54 days which is the longest since March 2020. Regardless, the supply lags from January 2019 by 25%. Back in January, Redfin reported that home prices have risen year-over-year in all 50 of the most populous metropolitan areas in the United States in December. Redfin Senior Economist Elijah de la Campa, reiterated the state of aggravating unaffordability, stating:
“Affordable housing havens have become harder and harder to come by; even places that saw some price relief last year, like Texas and Florida, are now seeing prices tick back up. Many people looking to move this year will likely opt to rent because it’s the more affordable option and rental affordability is expected to improve as more supply comes on the market.”
Brown Harris Stevens CEO Bess Freedman, recently joined CNBC to discuss the current housing affordability in the US. In her opinion, the current mortgage rates are the new normal and they could stay in the 6% range for quite some time even though they might dip a bit lower. Affordability remains an issue with first-time homebuyers nearing their 40s while they used to be 28 or 29 years old some ten years ago. The market is picking up but buyers continue to be rate sensitive. More activity could be seen if the rates decline even slightly in the next months. Overall, she tends to be bullish on housing saying that the US needs to get to a place where young people can buy their first home.
With that being said, let’s move to the 12 best residential real estate stocks to buy according to analysts.
An aerial view of a manufactured home community, with the many homes in a grid.
Our Methodology:
In order to compile a list of the 12 best residential real estate stocks to buy according to analysts, we first used a stock screener to screen residential real estate stocks that have the highest market caps. Moving on, we shortlisted the 12 stocks with the highest average upside potentials, as of February 5. The 12 best residential real estate stocks to buy according to analysts have been arranged in ascending order of their average upside potentials.
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 Residential Real Estate Stocks To Buy According to Analysts
12. Independence Realty Trust, Inc. (NYSE:IRT)
Average Upside Potential: 13.52%
Independence Realty Trust, Inc. (NYSE:IRT) is a leading multifamily real estate investment trust that owns and operates multifamily apartment properties across non-gateway US markets such as Atlanta, Louisville, Memphis, and Raleigh.
Independence Realty Trust, Inc. (NYSE:IRT) has established a differentiated portfolio in attractive markets. The firm’s portfolio is focused on the high-growth Sunbelt and Midwest regions which tends to be beneficial since the regions have shown strong fundamentals with favorable population migration trends due to a lower cost of living, better tax policy, and growing economic opportunity.
As compared to peers in non-gateway and coastal markets, the REIT has been successfully delivering industry-leading operating performance over the past few years, outpacing industry growth. Due to the firm’s attractive location in Sunbelt markets, as well as its investments in value-add renovations and new development initiatives, the momentum for the business is expected to continue.
11. American Homes 4 Rent (NYSE:AMH)
Average Upside Potential: 16.31%
American Homes 4 Rent (NYSE:AMH) is an internally managed Maryland real estate investment trust that is a leading large-scale integrated owner, operator, and developer of single-family rental homes.
AMH is one of the leading single-family rental companies and homebuilders in the United States, regarded for quality and integrity. The firm has reimagined single-family living to make leasing a home easy and accessible since 2012. AMH owned nearly 60,000 single-family properties in the Southeast, Midwest, Southwest, and Mountain West regions of the US, as of September 30, 2024.
Long-term tailwinds such as national high-quality single-family housing shortage, limited new construction, single-family rents being a lot cheaper than home ownership costs, and millennials aging into prime single-family living years, tend to favor AMH. In a favorable market, AMH is pursuing a consistent and strong external growth strategy. In October 2024, the firm opportunistically acquired a portfolio of nearly 1,700 high-quality detached single-family rental homes that overlay well within the firm’s existing footprint.
