Real estate stocks dip slightly amid Fed Rate cut, housing starts data

An analysis of 28 stocks The Real Deal tracks found that they fell an average of just 0.3% on the week

Federal Reserve Chairman Jerome Powell (Credit: Getty Images)
Federal Reserve Chairman Jerome Powell (Credit: Getty Images)

Real estate stocks dipped slightly this week amid the Federal Reserve’s decision to cut its benchmark interest rate and new data that showed home construction hit a 12-year high. Next week will bring a slew of real estate-related data from the U.S. Census Bureau.

Of the 28 major real estate stocks The Real Deal tracks, 15 companies saw their stock prices dip since Monday’s market open. On average, the group’s prices ticked down about 0.25 percent, far less than the 3 percent average gain from last week. Meanwhile, the Real Estate Select Sector SPDR Fund, which is heavily weighted in the real estate industry, this week rose about 1.4 percent.

The trend matched that of the broader market. The S&P 500 declined just 4 points, or about 0.14 percent.

The top performer, among the real estate companies TRD follows was real estate data firm CoStar Group, which rose 4.86 percent to close Friday at $595. Meanwhile, the weakest performer was real estate services firm Newmark Knight Frank. The company’s stock closed at $9.48, a 6.23 percent dip from market open on Monday.

On Wednesday, the Fed set its target federal funds rate to between 1.75 percent and 2.00 percent, the central bank’s second rate cut since July, after several years of steady rate hikes.

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The decision came the same day the U.S. Census Bureau and U.S. Department of Housing and Urban Development released their August residential construction statistics. Those showed that both single-family and multifamily construction building permits rose from July and from August 2018. The same was true for housing starts, which came in at a seasonally adjusted annual rate of 1,364,000, the highest since 2007.

Here are some data releases to watch next week:

  • Monday: U.S. Census Bureau’s report on e-commerce from 2017, with data on shipments, sales and revenue from the manufacturing, wholesale, services and retail sectors.
  • Wednesday: U.S. Census Bureau’s new residential sales figures.
  • Thursday: U.S. Census Bureau’s 2018 American Community Survey 1-Year Estimates, with demographic, economic and housing statistics like mortgage status and rent for places with populations of at least 65,000.