Sin City has become a hotbed of development and construction and it's not just Caesars and MGM leading the way.
Owning a Las Vegas Strip casino has become a bit like buying a professional sports franchise. There are only so many of them to go around and few ever come up on the open market,
Many of the properties on the famed 4.2 mile stretch of road are owned by Caesars Entertainment (CZR) - Get Caesars Entertainment Inc. Report and MGM Resorts International (MGM) - Get MGM Resorts International Report. These two giants each own an array of properties that let them serve everything from the highest of high rollers to the person looking to do Las Vegas on a tight budget.
Until recently, Las Vegas was a city where new construction -- at least for large-scale projects -- was expensive and fraught with peril. A lot of new casinos were announced, but few were ever actually built.
Fontainebleau Las Vegas, for example, has been on a nearly 20-year odyssey, under multiple owners now appears on track to actually open in late 2023. Perhaps even more impressive is that Resorts World Las Vegas was built from the ground up and opened on the North Strip during the pandemic.
It has become a Las Vegas arms race where a variety of players (including Hard Rock International which bought The Mirage from MGM) want a piece of the action. That has pushed available land on the Strip to incredibly high prices and attracted interest from billionaires looking to make their mark on what may be the world's hottest real estate.
Another Billionaire Wants a Las Vegas Strip Casino
Tilman Fertitta, the billionaire who owns the NBA's Houston Rockets as well as the downtown Las Vegas casino the Golden Nugget has closed on a 6.2-acre piece of land on the Strip for $270 million. That's $43 million per acre, according to a story in the Las Vegas Review-Journal.
A sometimes reality TV star who made his fortune in the restaurant business, Fertitta has kept his Las Vegas Strip plans close to the vest.
"It could also lead to a ground-up project by Fertitta on Las Vegas Boulevard, an ultra-competitive tourist corridor that regularly sees fresh development plans, albeit with a mixed record of projects actually getting built," the paper's Eli Segall speculated.
The property currently is home to retail including souvenir shops as well as a Tex-Mex restaurant and a motel that's currently closed. Fertitta could build a casino resort on the property or opt for a luxury hotel without a casino.
The Las Vegas Strip Is Hot
Caesars and MGM have not been idle on the Strip while new players including Fertitta look to move in on their turf. MGM has not only sold The Mirage, it has also acquired Cosmopolitan.
"The Cosmopolitan is an iconic brand with a loyal and complementary customer base that will further enhance our Las Vegas Strip portfolio," MGM CEO Bill Hornbuckle said during the company's first-quarter earnings call.
Caesars also has plans to sell its Flamingo property (although it could still end up operating it).
"Well, we're 23,000 rooms today. You're taking out the Rio rooms, and then you take out a property, depending on which property it is, let's say 3,000 to 4,000 rooms," Caesars CEO Tom Reeg said during his company's fourth-quarter-earnings call, in response to a question about selling a Strip property.
Caesars is also working on rebranding its Ballys Casino to its gambler-friendly Horseshoe brand.
real estate pandemic
Is Bitcoin Really A Hedge Against Inflation?
The long-standing claim that bitcoin is a hedge against inflation has come to a fork in the road as inflation is soaring, but the bitcoin price is not.
The long-standing claim that bitcoin is a hedge against inflation has come to a fork in the road as inflation is soaring, but the bitcoin price is not.
This is an opinion editorial by Jordan Wirsz, an investor, award-winning entrepreneur, author and podcast host.
Bitcoin’s correlation to inflation has been widely discussed since its inception. There are many narratives surrounding bitcoin’s meteoric rise over the last 13 years, but none so prevalent as the debasement of fiat currency, which is certainly considered inflationary. Now Bitcoin’s price is declining, leaving many Bitcoiners confused, as inflation is the highest it’s been in more than 40 years. How will inflation and monetary policy impact bitcoin’s price?
First, let’s discuss inflation. The Federal Reserve’s mandate includes an inflation target of 2%, yet we just printed an 8.6% consumer price inflation number for the month of May 2022. That is more than 400% of the Fed’s target. In reality, inflation is likely even higher than the CPI print. Wage inflation isn’t keeping up with actual inflation and households are starting to feel it big time. Consumer sentiment is now at an all-time low.
Why isn’t bitcoin surging while inflation is running out of control? Although fiat debasement and inflation are correlated, they truly are two different things that can coexist in juxtaposition for periods of time. The narrative that bitcoin is an inflation hedge has been widely talked about, but bitcoin has behaved more as a barometer of monetary policy than of inflation.
Macro analysts and economists are feverishly debating our current inflationary environment, trying to find comparisons and correlations to inflationary periods in history — such as the 1940s and the 1970s — in an effort to forecast where we go from here. While there are certainly similarities to inflationary periods of the past, there is no precedent for bitcoin’s performance under circumstances such as these. Bitcoin was born only 13 years ago from the ashes of the Global Financial Crisis, which itself unleashed one of the greatest monetary expansions in history up until that time. For the last 13 years, bitcoin has seen an environment of easy monetary policy. The Fed has been dovish, and anytime hawkishness raised its ugly head, the markets rolled over and the Fed pivoted quickly to reestablish calm markets. Note that during the same period, bitcoin rose from pennies to $69,000, making it perhaps the greatest-performing asset of all time. The thesis has been that bitcoin is an “up and to the right asset,” but that thesis has never been challenged by a significantly tightening monetary policy environment, which we find ourselves at the present moment.
The old saying that “this time is different,” might actually prove to be true. The Fed can’t pivot to quell the markets this time. Inflation is wildly out of control and the Fed is starting from a near-zero rate environment. Here we are with 8.6% inflation and near-zero rates while staring recession straight in the eyes. The Fed is not hiking to cool the economy … It is hiking in the face of a cooling economy, with already one quarter of negative gross domestic product growth behind us in Q1, 2022. Quantitative tightening has only just begun. The Fed does not have the leeway to slow down or ease its tightening. It must, by mandate, continue to raise rates until inflation is under control. Meanwhile, the cost-conditions index already shows the biggest tightening in decades, with almost zero movement from the Fed. The mere hint of the Fed tightening spun the markets out of control.
There is a big misconception in the market about the Fed and its commitment to raising rates. I often hear people say, “The Fed can’t raise rates because if they do, we won’t be able to afford our debt payments, so the Fed is bluffing and will pivot sooner than later.” That idea is just factually incorrect. The Fed has no limit as to the amount of money it can spend. Why? Because it can print money to make whatever debt payments are necessary to support the government from defaulting. It’s easy to make debt payments when you have a central bank to print your own currency, isn’t it?
I know what you’re thinking: “Wait a minute, you’re saying the Fed needs to kill inflation by raising rates. And if rates go up enough, the Fed can just print more money to pay for its higher interest payments, which is inflationary?”
Does your brain hurt yet?
This is the “debt spiral” and inflation conundrum that folks like Bitcoin legend Greg Foss talks about regularly.
Now let me be clear, the above discussion of that possible outcome is widely and vigorously debated. The Fed is an independent entity, and its mandate is not to print money to pay our debts. However, it is entirely possible that politicians make moves to change the Fed’s mandate given the potential for incredibly pernicious circumstances in the future. This complex topic and set of nuances deserves much more discussion and thought, but I’ll save that for another article in the near future.
Interestingly, when the Fed announced its intent to hike rates to kill inflation, the market didn’t wait for the Fed to do it … The market actually went ahead and did the Fed’s job for it. In the last six months, interest rates have roughly doubled — the fastest rate of change ever in the history of interest rates. Libor has jumped even more.
This record rate-increase has included mortgage rates, which have also doubled in the last six months, sending shivers through the housing market and crushing home affordability at a rate of change unlike anything we’ve ever seen before.
All of this, with only a tiny, minuscule, 50 bps hike by the Fed and the very beginning of their rate hike and balance sheet runoff program, merely started in May! As you can see, the Fed barely moved an inch, while the markets crossed a chasm on their own accord. The Fed’s rhetoric alone sent a chilling effect through the markets that few expected. Look at the global growth optimism at new all-time lows:
Despite the current volatility in the markets, the current miscalculation by investors is that the Fed will take its foot off the brake once inflation is under control and slowing. But the Fed can only control the demand side of the inflationary equation, not the supply side of the equation, which is where most of the inflationary pressure is coming from. In essence, the Fed is trying to use a screwdriver to cut a board of lumber. Wrong tool for the job. The result may very well be a cooling economy with persistent core inflation, which is not going to be the “soft landing” that many hope for.
Is the Fed actually hoping for a hard landing? One thought that comes to mind is that we may actually need a hard landing in order to give the Fed a pathway to reduce interest rates again. This would provide the government the possibility of actually servicing its debt with future tax revenue, versus finding a path to print money to pay for our debt service at persistently higher rates.
Although there are macro similarities between the 1940s, 1970s and the present, I think it ultimately provides less insight into the future direction of asset prices than the monetary policy cycles do.
Below is a chart of the rate of change of U.S. M2 money supply. You can see that 2020-2021 saw a record rise from the COVID-19 stimulus, but look at late 2021-present and you see one of the fastest rate-of-change drops in M2 money supply in recent history.
In theory, bitcoin is behaving exactly as it should in this environment. Record-easy monetary policy equals “number go up technology.” Record monetary tightening equals “number go down” price action. It is quite easy to ascertain that bitcoin’s price is tied less to inflation, and more to monetary policy and asset inflation/deflation (as opposed to core inflation). The chart below of the FRED M2 money supply resembles a less volatile bitcoin chart … “number go up” technology — up and to the right.
Now, consider that for the first time since 2009 — actually the entire history of the FRED M2 chart — the M2 line is potentially making a significant direction turn to the downside (look closely). Bitcoin is only a 13-year-old experiment in correlation analysis that many are still theorizing upon, but if this correlation holds, then it stands to reason that bitcoin will be much more closely tied to monetary policy than it will inflation.
If the Fed finds itself needing to print significantly more money, it would potentially coincide with an uptick in M2. That event could reflect a “monetary policy change” significant enough to start a new bull market in bitcoin, regardless of whether or not the Fed starts easing rates.
I often think to myself, “What is the catalyst for people to allocate a portion of their portfolio to bitcoin?” I believe we are beginning to see that catalyst unfold right in front of us. Below is a total-bond-return index chart that demonstrates the significant losses bond holders are taking on the chin right now.
The “traditional 60/40” portfolio is getting destroyed on both sides simultaneously, for the first time in history. The traditional safe haven isn’t working this time around, which underscores the possibility that “this time is different.” Bonds may be a deadweight allocation for portfolios from now on — or worse.
It seems that most traditional portfolio strategies are broken or breaking. The only strategy that has worked consistently over the course of millennia is to build and secure wealth with the simple ownership of what is valuable. Work has always been valuable and that is why proof-of-work is tied to true forms of value. Bitcoin is the only thing that does this well in the digital world. Gold does it too, but compared to bitcoin, it cannot fulfill the needs of a modern, interconnected, global economy as well as its digital counterpart can. If bitcoin didn’t exist, then gold would be the only answer. Thankfully, bitcoin exists.
Regardless of whether inflation stays high or calms down to more normalized levels, the bottom line is clear: Bitcoin will likely start its next bull market when monetary policy changes, even if ever so slightly or indirectly.
This is a guest post by Jordan Wirsz. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.bonds covid-19 bitcoin btc mortgage rates housing market gold
Winners and losers of this volatile housing market
Any market that pushes some businesses to the brink of insolvency also will create opportunities for others. Through numerous interviews with industry…
The last two years have been good to Christian Dicker.
Like many loan officers, Dicker was working nights and weekends, banging out refinancings and purchase mortgages at record-low rates for clients. It didn’t matter where he was — getting dinner with his family at a fancy restaurant or out on the lake on a boat, Dicker always had his phone on his hands to make sure he didn’t miss any of his clients’ emails or calls. About 40% of his business came from refis in the summer of 2021 even when his focus was on purchase mortgages his entire career.
But the boom times are over, and he knows it.
One of Dicker’s clients this past weekend backed out of a $295,000 houmese purchase in Michigan this past weekend. That sort of thing was virtually unheard of a year ago, when rates were about 3%.
“After hearing their monthly mortgage payment would be around $2,000 a month, my client backed out of the offer the next day,” said Dicker, a senior loan officer at Motto Mortgage. “Less than a year ago, my client could’ve bought the home with a monthly mortgage payment of $1,700.”
The rising rate environment has thinned Dicker’s pipeline, culling refis almost entirely. And he’s far from alone. Market conditions have forced countless LOs, including Dicker, to find creative solutions to lock down home purchases for clients whose purchasing power has diminished greatly in the past six months. Origination volume will continue its steady, significant decline, meaning smaller paychecks for LOs and their lenders. All while their prospective borrowers continually are priced out — meaning many will indefinitely postpone or give up the search for a new home entirely.
The sudden spike in interest rates – which rose to a high of more than 6% in mid-June before falling to the 5.75% range a week later – has proven a shock to the system for the mortgage industry. Lenders staffed up during the pandemic to take advantage of those low rates, and now find themselves hugely overstaffed as business falls dramatically. For Dicker and the industry at large, the future is increasingly uncertain and the overall outlook can feel like a losing proposition.
“There really are hardly any winners in the mortgage industry,” said Joe Garrett, founder of banking and mortgage banking consulting firm Garrett, Mcauley & Co. “The winners in terms of mortgage companies are the ones who have a lot of servicing because the value has gone up as rates have gone up. Outside of the mortgage business, the winners are homeowners who refinanced.”
The Mortgage Bankers Association projects that of $2.4 trillion in originations this year, just $730 billion will be from refis. Compared with 2021, origination volume is expected to drop 40% from last year’s $4 trillion origination volume. Less business for lenders and real estate brokerages, in return, is hurting title companies, tech vendors, appraisers and mortgage insurance firms.
But any market that pushes some businesses to the brink of insolvency also will create opportunities for others. Through numerous interviews with industry players, HousingWire assessed the rapidly changing housing market to determine who remains vulnerable to the higher-rate environment, and who’s primed to capitalize in the months ahead.
“You’re going to start to see the housing market price a lot of people out, which means there’s going to be fewer loans out there to be done, which means you’re going to probably see a lot of people starting to exit,” said Coley Carden, vice president of residential lending at Winchester Co-Operative Bank.
Banks, including Wells Fargo and JPMorgan Chase, which own and hold portfolios of mortgage backed securities (MBS), as well as nonbank lenders, have borne the brunt of rising interest rates thus far. Both depositories have instituted large-scale layoffs at their mortgage divisions, and Wells Fargo has indicated it plans to pull back on its mortgage business.
Nonbank lenders, including Pennymac, Mr. Cooper, loanDepot, Guaranteed Rate, Fairway Independent Mortgage, Interfirst Mortgage Co., Movement Mortgage, New Rez/Caliber, First Guaranty Mortgage Corporation and Better.com, all have conducted at least one round of workforce reductions this year, and further staff eliminations are expected to continue as volume falls. More than 10,000 industry jobs likely have already been shed during the past year, analysts told HousingWire.
While industry observers say originators are in a better position now than during the financial crisis in 2008, largely as a result of the refi boom over the past two years, analysts including Argus Research’s Kevin Heal, expect gain-on-sale margins to decline in coming quarters due to volatility and lenders selling loans in the secondary market with lower gains, or at a loss.
“With today’s rising interest rates, combined with inflation, prospective buyers have seen their buying power reduced greatly,” said Sean Dobson, chief executive officer at Amherst Holdings. “This will likely cause some, who may have been ready to purchase otherwise, to take a pause.”
Brokerages prepare for leaner times
Reduced buying power means fewer closed deals for real estate brokerages, whose agents used to receive love letters from home shoppers desperate to win bidding wars.
However, real estate brokerages aren’t immune from the current market environment. Because their agents are typically 1099 contractors, they are thought to be more insulated than mortgage lenders, whose employees generally receive W2s.
In early June, luxury-focused Side, which has raised more than $200 million at a valuation of $2.5 billion, laid off 40 workers, or about 10% of its staff.
“In our efforts to meet demand, we grew the team faster than we could train, support and develop everyone to meet the demands of changing roles and processes,” founder and CEO Guy Gal said in a written statement. “Considering this paired with the macroeconomic trends shaping the real estate market, we decided to slow down and get better organized so that we can speed up again.”
Tech-fueled Redfin laid off 470 employees, or about 8% of its workforce, saying housing demand fell short of expectations in May. But the brokerage is unusual in that it has salaried agents and a business model that is stretched thin during housing market downturns. Compass, which similarly has a tech bend and is also unprofitable, eliminated about 450 positions, roughly 10% of the brokerage’s employees. Compass also announced it would halt any merger and acquisition activity for the rest of the year.
Other top brokerage leaders were quick to say such troubles didn’t necessarily mean stronger headwinds for real estate brokerages.
“You have to be an ant putting away crumbs when the weather is good to have enough food when the weather is bad,” Frederick Peters, CEO of Coldwell Banker Warburg Peters, told RealTrends. “Compass never did that.”
Still, many large brokerages are taking a hard look at their physical footprints, vendor relationships and other potential means of trimming the fat as volume drops.
Demand falls for homebuilders
Fewer buyers in the market also means homebuilders are enticing shoppers with incentives, which negatively affects margins.
“Things like buying down a customer’s rate, or offering buyers free upgrades to their house and lowering lot premium don’t really count as cutting prices, it counts as giving them away stuff for free,” said Carl Reichardt, a homebuilding analyst at BTIG.
Despite the negative effect on builders’ bottom line, such incentives still aren’t luring buyers. A combination of higher home prices, rising interest rates, consumer concerns about the future of the real estate market and the lack of new home inventory has resulted in a decline in sales and traffic, according to Reichardt.
More than half of the 86 homebuilders surveyed by the BTIG/HomeSphere State of the Industry Report reported a year-over-year decrease in sales, marking the largest share of builders to experience an annual decline in sales in more than four years. Only 20% reported year-over-year traffic growth, the lowest level since April 2020, at the start of the pandemic.
Landlords hold the cards
The phrase “cash is king” has perhaps never been more apropos – home prices remain high, and rising rates put mortgage seekers at a disadvantage.
Even if mortgage rates are hovering in the 6% range, homes are still going to sell, loan officers said. Though not necessarily to buyers with financing. Homebuyers who offer cash were four times as likely to win a bidding war as those who didn’t in 2021, according to data from Redfin.
The median existing housing price surged 14.8% from a year ago to an all-time high of more than $407,000 in May, exceeding the $400,000 level for the first time, a report from the National Association of Realtors showed.
Motto Mortgage’s Dicker recalls providing loans in the mid- 3% level in October. “Not even a year ago rates nearly doubled to just above 6%. You can’t get something of a newer quality and bigger size compared to last year,” he said.
All-cash sales made up 25% of transactions in May, with 16% coming from individual investors or second-home buyers taking advantage of the rising demand for renting, according to the NAR.
“More people are renting, and the resulting rent price escalation may spur more institutional investors to buy single-family homes and turn them into rental properties,” said Leslie Rouda Smith, president at NAR.
Amherst Holdings, which acquired more than 46,600 rental homes across the country with an estimated value of more than $7.6 billion, sees potential for more business in a downmarket for the mortgage industry. The spike in borrowing costs means consumers will find themselves unable to purchase the same home that they might have been able to afford a year ago.
“If demand for household buyers of properties cools off, we may see more opportunities for companies in the leasing space to supply single-family rentals to those who have been priced out of the homebuying market,” said Amherst’s Dobson.
“It seems desirable properties whether it be a new single-family home that has all the bells and whistles or if it’s an apartment for rent they are renting up at higher prices and they’re also renting faster,” added Aaron Sklar, partner at Kiser Group.
Rents for apartments in professionally managed properties were up 12% nationally in the first quarter of 2022 from a year earlier, with increases in several metro areas exceeding 20%, according to a report from the Joint Center for Housing Studies at Harvard University.
Rent for single-family homes rose even faster than those for apartments, pushed up by demand for more space among households working remotely, the report said. Single-family rents nationally rose 14% in March 2022, marking the 12th straight month of record-high growth, according to CoreLogic data.
“It’s definitely a landlord’s market,” said Kiser Group’s Sklar. “Rents seem to be going up just as high as the interest rates are. I don’t think it’s a win for anyone on the lending side. But I do think that owners of properties, and single-family home operators, they’re the real beneficiaries of higher interest rates.”
The post Winners and losers of this volatile housing market appeared first on HousingWire.mortgage rates real estate mortgages housing market pandemic interest rates
Best Mortgage Stocks to Invest In
2022 has not been kind to mortgage stocks. Rates are rising and homebuyers aren’t hitting the market as hard as previous years.
The post Best Mortgage…
2022 has not been kind to mortgage stocks. For more than a decade, mortgage rates have been historically low and homebuyers took advantage of it. Now mortgage rates are on the rise, which makes mortgages less affordable for homebuyers and the market has slowed.
Why Are Mortgage Stocks Down?
As the US recovered from the COVID pandemic, mortgage rates were low and the US economy was in recovery mode. That’s when the Federal Reserve vowed to end its easy money stance and begin to raise interest rates in 2022. Earlier in June, the Fed raised rates 75 basis points—more than expected. Mortgage rates rose accordingly.
At the beginning of 2022, homebuyers could get a mortgage rate around 3% on average. By June, mortgage rates were approaching 6%. Another data point for the mortgage market is mortgage applications. Applications can be an indicator of demand for mortgages. Mortgage applications fell 6.5% in the beginning of June this year.
Mortgage stocks also make refinance mortgages. Because mortgage rates were so low for so long, most homeowners have already refinanced their mortgages at these low rates. As mortgage rates keep rising, the market for refinancing looks pretty bleak.
On the other hand, the red-hot housing market has lifted home values to new highs. That means home equity is also on the rise. As the equity in a home rises, homeowners have the chance to take out home equity loans. Home equity loans could be a source of new sales for mortgage stocks this year. Just like other types of mortgages, home equity loans face rising rates, which will likely make potential borrowers think twice about taking out a home equity loan.
Best Mortgage Stocks on the Market
Rocket Companies (NYSE: RKT) and Lendingtree (NASDAQ: TREE) are two mortgage stocks to consider.
Rocket Companies is the #1 home lender in the US. It runs the popular mortgage app Rocket Mortgage. According to its most recent presentation, it has processed over $1.5 trillion in mortgages since it started. Though, the company has gain notoriety over the last few years, it has been in business for 36 years.
In addition to home loans, Rocket Companies also does car loans. With its recent buyout of Truebill, the company also has a personal finance platform. The platform handles everything from lowering bills, cancelling subscriptions, tracking spending, managing budgets and improving credit. Truebill has over $100 million of recurring sales.
Lendingtree is also a leader in online mortgages. The company also sells insurance, which has grown in its overall sales. In addition, Lendingtree makes personal loans and issues credit cards to its customers. The company focuses on borrowers with good credit. For instance, customers with personal loans have an average credit score of 620. In addition, mortgage customers have an average credit score of 690.
Lendingtree stock does not pay a dividend and has a P/E ratio of 17.5x
Mortgage Stock Giants
Bank of America (NYSE: BAC) and JPMorgan Chase (NYSE: JPM) are two bank mortgage giants with struggling stock prices.
Bank of America is a leader in personal banking. In addition to mortgages, the company does business lending, credit cards and wealth management. According to its most recent presentation, mortgage loan balances have recovered briskly since their pandemic lows. Its customers are also in great shape. For instance, past due customers are below their pre-pandemic levels of 2019. In addition, charge-offs have been cut in half since the first quarter of 2021.
For banks, net interest income plays an important role in a company’s net income. Net interest income is the difference between the rate a bank pays a customer for their checking and savings deposits and the rate it charges loan and credit card borrowers. For Bank of America, net interest income is up from the first quarter of 2021 to $11.7 billion.
JPMorgan Chase is one of the largest banks in the US. According to its most recent presentation, mortgage loans are up 55% since 2019. Though the presentation noted that JPMorgan thinks new home mortgages will be flat and refinances will fall in 2022.
The company thinks its net interest income will be over $56 billion in 2022. JPMorgan and Chase stock is down 27% this year and trades at a P/E ratio of under 9x. The stock also pays a dividend yield of 3.4%.
Arbor Realty Trust originates and services loans for multifamily real estate. In its first quarter 2022 presentation, the company states, “Arbor Realty Trust is one of the nation’s premier real estate finance companies, offering the most comprehensive, customized and creative financing platforms in the commercial real estate industry. Arbor’s diversified lending solutions are bolstered by its economic foundation as a real estate investment trust; however, it prides itself on conducting business as not just another mortgage REIT, but as a firm that builds long-term client partnerships with a results-oriented approach that produces innovative and efficient financial solutions.”
During the first quarter of 2022, Arbor Realty Trust raised its dividend to $.38 per share. It has increased its dividend for eight straight quarters. The stock is down 26.5% this year now has an eye-popping dividend yield of 11%.
Annaly Capital Management is one of the largest mortgage REITs. According to its first quarter 2022 slide deck, the company invests in mortgage-backed securities that are guaranteed by government agencies. It also invests in mortgage servicing rights, which provide the right to service residential loans in exchange for a portion of the interest payments made on the loans. Annaly stock is down over 21% this year and now fetches a dividend yield of nearly 14%. The stock also trades at a P/E ratio of 3.6x.
Investing in Mortgage Stocks
Mortgage rates are as high as they have been in recent past. In fact, the home buying market has compltly flipped in the past year. Therefore, it’s important to do your due diligence before investing in mortgage stocks.
Sign up for one of the best investment newsletters for expert insights and investment tips. Find balance in your portfolio during this difficult time for investors. You may want to keep a close eye on mortgage stocks over the coming months due to inflation concerns and market uncertainty.nasdaq stocks pandemic fed federal reserve reit mortgage rates real estate mortgages housing market recovery interest rates
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