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5 at 5: Your Daily Digest for Real Estate Investing, 7/26/21

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5 at 5: Your Daily Digest for Real Estate Investing, 7/26/21

New-home sales hit pandemic lows, administration offers up more mortgage help, a mortgage REIT goes CRE in merger, some REITs for growth investors, short-term rental offers two-punch play for new investors.

In Today’s News

Sales of Newly Built Homes Slip to Pandemic Lows

The U.S. Census Bureau and Department of Housing and Urban Development (HUD) said in a monthly report today that sales of new homes in the U.S. fell in June to the lowest level since early 2020, as high prices and limited selection frustrated scores of would-be buyers, reports.

The Millionacres takeaway: Those same issues are also keeping some potential home sellers on the sidelines, since they’d then have to buy into that same high-priced market. These problems also aren’t expected to go away anytime soon, and each time a report like this comes out, speculation about when the housing boom goes bust naturally emerges.

Administration Unveils Plan to Cut Payments on Government-Backed Loans By Up To 25%

The Biden administration has announced new loan modification options for borrowers who have government-backed home loans in order to help homeowners who are still struggling to make their mortgage payments due to the COVID-19 pandemic, the National Association of Home Builders reports today.

The Millionacres takeaway: The modifications — which include extending the loan to lower the payment — include VA, FHA, and USDA loans, and are a way to bolster a market where a lot of homeowners still struggling from the pandemic may see mortgage forbearances end soon.

Benefit Street Partners Realty Trust and Capstead Mortgage to Form New CRE REIT

Non-listed Benefit Street Partners Realty Trust (BSPRT) and Capstead Mortgage (NYSE: CMO) announced plans today to merge into a new entity to be called Franklin BSP Realty Trust that will trade on the NYSE as FBRT.

The Millionacres takeaway: Capstead’s portfolio will transition from residential to commercial, and the resulting entity will be the fourth-largest CRE REIT, the companies said. They also said they expect the CRE focus to generate higher returns with less volatility and lower leverage than Capstead’s current strategy in the residential markets.

Today on Millionacres

Like Growth? You’ll Love These REITs

Real estate investment trusts (REITs) are structured specifically to pass income on to shareholders. However, some landlords have a heavier focus on growth. If that sounds interesting to you, take a quick look at these three growth-minded REITs.

The Millionacres takeaway: Our Reuben Gregg Brewer notes that one of these players is an old hand, while the others are relatively new, and he explains why all of them have substantial growth prospects ahead.

Short-Term Rental Occupancy Hits All-Time High; Daily Rates Rise Too

Short-term rentals are more popular than ever. In fact, according to data platform AirDNA, the occupancy rate on short-term rental (STR) properties is up 20% over 2019 and is now at its highest point on record, our Aly Yale reports.

The Millionacres takeaway: Ready to take advantage of this one-two punch of profitability by investing in an STR of your own? Study up on the pros and cons first, and use this guide to get started.

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The Motley Fool has a disclosure policy. Editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Editorial content from Millionacres is separate from The Motley Fool editorial content and is created by a different analyst team.

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