Rental Market, ETF Has Two Faces | ETF Trends

Layoffs and job losses aren’t just terrible for the housing market, it could also effect the correlation between a growing bunch of apartment vacancies, hurting related exchange traded funds (ETFs) and investments.

Vacancy rates for houses and apartments were just released and the jobless rates are haunting building owners more so than ever, reports Bill Radke for Marketplace. Whether renters are running home to dad and mom’s or hooking up with a roommate to alleviate costs, the demand is lowered across the board. Rental vacancies are at 10% this year, so far, and are forecast to grow even further.

Undermining the rental market are the record number of foreclosures. But from another point-of-view, the rental market can’t be big enough. It can go either way, depending on which side of the fence you are on.

Where there are vacancies in some areas, others are experiencing tight rental conditions and a competitive market, reports Sue McAllister for San Jose Mercury News. Record numbers of Silicon Valley homeowners have been foreclosed upon this year, and most must seek rental housing once they leave their homes. If tenant-occupied houses are in foreclosure, tenants nearly always get evicted, and so it goes.

iShares FTSE/NAREIT Residential Real Estate Fund (REZ) could feel the impact of the rental market, whether it tightens or grows. The fund is down 22.9% year-to-date.

Real Estate Exchange Traded Fund (ETF)

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.