Investors exited from the Vanguard Real Estate ETF (NYSEArca: VNQ) to the tune of $2.4 billion in the past month according to data from XTF.com, but that didn’t stop VNQ from gaining 6.3 percent month-to-date.
VNQ pierced its 50-day moving average and is heading towards its 200-day moving average. Despite the mostly negative news coming from the real estate sector, VNQ has been tracking higher than the S&P 500 as of late.
Just last month, the National Association of Home Builders/Wells Fargo Housing Market Index hit a three-year low. A combination of rising interest rates and low home affordability dented the housing market for much of 2018.
However, builder confidence rebounded as the index went up to 58 in January compared to the 56 reading in December. Furthermore, the central bank has been sounding increasingly dovish as of late, which could mean that less rate hikes than anticipated for 2019–something that could help give the sector a much-needed boost.
Prices Falling, Rents Rising
Rising in conjunction with mortgage rates are home prices, putting prospective buyers out of reach. The latest data from the National Association of Realtors showed that the Quarterly Housing Affordability Index has been dropping thanks to a rise in median home prices.