Real estate has been a mixed bag over the last few years. As the Federal Reserve has raised rates to combat inflation, the sector has been hit hard on a number of fronts. Investors have mostly avoided the sector, finding higher yields in less risky assets like bonds and cash. Even so, some real estate stocks and REITs have fared worse than others.
The biggest offenders? The mortgage REITs.
These high-yielding firms that specialize in owning mortgage bonds and giving debt to property owners have been some of the worst-performing real estate stocks since the Fed started hiking rates. However, with the Fed reversing course, mortgage REITs may start to look like high-yielding bargains. To that end, investors looking to juice their income may find plenty to like about MREITs.
