As an increasing number of Americans look to renting as a more affordable option to owning a new home, exchange traded funds that focus on residential real estate investment trusts could continue to capitalize on the trend.

“A new Freddie Mac survey shows that affordability remains top of mind for those individuals looking to rent or purchase a home,” according to a Freddie Mac note.

Specifically, Freddie Mac’s recent survey, “Profile of Today’s Renter and Owner”, has found that an unprecedented 84% of renters believe renting is more affordable than owning, an all-time high for the survey, or up 17 percentage points from February 2018. Furthermore, 62% of renters revealed satisfaction with their rental experience, and 73% of renters feel that minor or no renovations should be made to their rental property, which may suggest they are happy with their current rental units.

Affordability remains a key issue for renters as 42% of renters paid over a third of their household income on rent compared to 24% of owners on their mortgage payments.

About 18% percent of renters surveyed also showed no interest in ever purchasing a home, or up four percentage points from August 2017.

“The housing market is strong and, based on our survey, the low mortgage rate environment may inspire both renters and owners to make an educated move this spring,” David Brickman, CEO of Freddie Mac, said in a note. “While Baby Boomers tend to be satisfied with their current housing situation, younger generations are still struggling to determine whether to rent or purchase a home, largely due to lack of supply and affordability constraints.”

Investors who want a piece of the real estate action can do so through funds like the Vanguard Real Estate ETF (NYSEArca: VNQ). VNQ seeks to provide a high level of income and moderate long-term capital appreciation by tracking the performance of the MSCI US Investable Market Real Estate 25/50 Index that measures the performance of publicly traded equity REITs and other real estate-related investments. However, broad REITs sector-specific ETFs have low exposure to residential REITs, with VNQ’s underlying portfolio including a 14.6% tilt to residentials.

On the other hand, ETF investors who are interested in gaining exposure to this ongoing trend in the housing market can consider residential REITs-heavy ETFs, such as the iShares Residential Real Estate Capped ETF (NYSEArca: REZ) and NuShares Short-Term REIT ETF (BATS: NURE). NURE includes a hefty 47.5% tilt toward apartment or rental-related REITs while REZ has a 50.6% weight in residential REITs.

For more information on real estate investment trusts, visit our REITs category.

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