How do interest rates affect REITs?

How do interest rates affect REITs?

Interest rates can significantly impact REITs. When rates rise, borrowing costs increase for REITs, which can reduce their profitability.

What happens to REIT prices when interest rates go up?

Typically, when interest rates rise, REIT prices may decline as investors seek higher yields elsewhere, making REITs less attractive.

Are there specific types of REITs that are more affected by interest rates?

Yes, mortgage REITs are usually more sensitive to interest rate changes compared to equity REITs, as their income relies heavily on interest spreads.

How can investors protect themselves from rising interest rates?

Investors can consider diversifying their portfolios, investing in REITs with strong balance sheets, or focusing on sectors less affected by interest rates.

Is there a historical trend of REIT performance during rate hikes?

Historically, REIT performance during rate hikes has varied, but many REITs have shown resilience if they have strong fundamentals.