We recently compiled a list of the 12 Best REIT Stocks to Buy Now. In this article, we are going to take a look at where Equity Residential (NYSE:EQR) stands against the other REIT stocks.
The US Real Estate So Far in 2025
While the mortgage rates have risen despite the Fed cutting rates, potential homebuyers are left with the choice to either postpone the homebuying or resort to current mortgage rates as well as elevated home prices. According to Freddie Mac, the 30-year fixed mortgage rate went above 7% in the week ended January 16. Experts are convinced that mortgage rates need to drop to 6% or lower for the housing market to come to life and rates above 7% deem the market dead where nobody is going to buy. Lee Baker, a member of CNBC’s Financial Advisor Council, reiterated the adverse situation saying:
“If what you’re hoping or wishing for is an interest rate at 4%, or housing prices to drop 20%, I personally don’t think either one of those things is remotely likely in the near term”
Another issue of concern has been the devastating wildfires in LA which have deepened its already existing housing shortage. Redfin reported that almost one of every six homes within the perimeters of the Palisades and Eaton fires have either been damaged, destroyed or are inaccessible. Meanwhile, the prices in the rental markets with more displaced turning to them.
According to the New York Times, the affectees would find it hard to find accommodation in a metro area that already had a shortage of around 337,000 homes, as of 2022. Data from the Los Angeles Department of Building and Safety reveals that apartment units approved by the city of Los Angeles dropped to a 10-year low in 2024. Victor M. Gordo, the mayor of Pasadena, exclaimed the issue at hand as follows:
“One of the biggest challenges ahead will be getting people who lost their homes into permanent, long-term housing”
Our Methodology:
In order to compile a list of the 12 best REIT 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 REIT 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).
An exterior shot of a newly acquired apartment building, signifying the company’s acquisition of large residential properties.
Equity Residential (NYSE:EQR)
Number of Hedge Fund Holders: 30
Equity Residential (NYSE:EQR) focuses on the acquisition, development, and management of residential properties. The firm owns or has investments in 312 properties comprising 84,018 apartment units, with a strong presence in major cities including Boston, New York, Washington, D.C., Seattle, San Francisco, and Southern California, and a growing presence in Denver, Atlanta, Dallas/Ft. Worth and Austin.
EQR began in 1993 as a portfolio of about 20,000 apartment units positioned primarily in garden-style properties in the Midwest and South. The firm’s high-quality, well-located apartment properties continue to capture a strong demand. The firm has positioned this portfolio of urban and suburban properties in places that attract a resident demographic that chooses to rent for lifestyle reasons and due to less housing affordability.
Equity Residential (NYSE:EQR) benefits from a general undersupply of housing for both renting and owning. Its markets have a high cost of single-family housing which creates a robust demand to rent. The firm’s apartment business also benefits from its prime demographic, which chooses to marry later and have children later than previous generations. High employment levels among its well-earning resident base and wage growth across the economy deem the firm’s apartment properties an appealing choice and position EQR well to continue to grow cash flows.
Overall EQR ranks 10th on our list of the best While we acknowledge the potential of EQR as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than EQR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
