3 Real Estate Funds To Buy As U.S. Housing Gathers Steam

Per the joint report from, U.S. Census Bureau and the U.S. Department of Housing and Urban Development, homebuilding in the United States rebounded in the month of October as permits for building new homes hit a 12-year high. The metric came in at 1.461 million units in the month.

Further, single-family authorizations increased 3.2% to 909,000 in October from the prior month. Also, authorization of units in buildings with five units or more came in at 505,000 in the month. This was the fastest rate of authorizations of building permits since 2007.

This rise was strongly supported by a 38.2% monthly increase in the number authorizations of buildings with two and four housing units. While permitting activity increased across all the regions, the Northeast posted the largest monthly increase of 19.5%.

Meanwhile, housing starts increased 3.8% from September to 1.314 million units in October. Furthermore, single-family construction rose for the fifth straight month to 936,000 in October, 2% higher than that in September.

Federal Reserve’s move to lower interest rates has been supporting the U.S. economy. This is evident from the fact that the country’s housing sector exhibits strength at a time when the global economy is reeling under pressure from trade tensions and weak economic fundamentals.

For investors looking to park their money in the real estate sector, mutual funds are the cheapest and most convenient options. This category of funds also offers solid protection against inflation. The real estate sector has recently seen tough times but the presence of this investment vehicle generally adds stability to a portfolio. Usually, volatility in property prices is far less than the extent experienced by stocks. Adding such funds to a widely diversified portfolio would increase returns, while significantly reducing the associated risk.

3 Best Choices

Given such circumstances, we have highlighted three real estate mutual funds that are poised to gain from such factors. These funds also carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy). Moreover, the funds have encouraging three and five-year returns. Additionally, the minimum initial investment is within $5000.

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