Apartment REIT shares are positioned for a 4.2% rally in Monday's opening session after Freddie Mac's preliminary weekly survey, leaked Sunday evening to Bloomberg, showed the average 30-year fixed mortgage rate sliding below 5.8% for the first time since June 2022. The official release is scheduled for Thursday morning, with the prior week's reading at 6.04%.
The decline follows the steep retreat in 10-year Treasury yields from the early-April peak of 4.71% and reflects mortgage spreads tightening to 174 basis points, the narrowest since late 2024. Mortgage Bankers Association data released Friday already showed purchase applications jumping 18.4% in the prior week, the largest weekly gain in 28 months.
REIT Beneficiaries Lead Charge
AvalonBay Communities (AVB) and Equity Residential (EQR) traded up 4.6% and 4.1% respectively in indicative pre-market quotes, while Mid-America Apartment (MAA) gained 5.2%, UDR (UDR) climbed 4.8%, and Camden Property Trust (CPT) added 4.4%. Single-family rental landlords also benefited, with Invitation Homes (INVH) up 3.8% and AMH (AMH) up 4.1%.
The Vanguard Real Estate ETF (VNQ) was indicated 3.4% higher on the open, while iShares U.S. Home Construction ETF (ITB) rose 5.7%. Homebuilders Lennar (LEN), D.R. Horton (DHI), and PulteGroup (PHM) gained 5.4%, 6.1%, and 4.9% respectively.