Mortgage applications in the U.S. rose last week because of increased demand for refinancing. The pickup in demand is largely due to new lows in interest rates, which are a result of increased demand for U.S. Treasury securities in the wake of fears over a Greek exit from the eurozone.
The Mortgage Bankers Association said its seasonally adjusted index of refinancing applications rose 13%, but loan requests for home purchases dropped 2.4%, according to CNBC.
The low interest rates are also aiding REITs, which are able to pay better dividends. Their cost of borrowing is lower, making their businesses more profitable.
Ben Bernanke said the Federal Reserve will buy bonds to drive interest rates lower if the economy needs it. The Fed doesn't expect interest rates to rise until at least late 2014.
Business section: investing ideas
Borrowing is cheap, and REITs are taking advantage of it. If interest rates are expected to stay low, then they will continue to be more profitable.
Following is a list of residential and diversified REITs that have positive DuPont trends. How long will they see this profitability?
The list is sorted alphabetically. (Access free, interactive tools to analyze these ideas.)
1. Apollo Commercial Real Estate Finance
2. ARMOUR Residential REIT
3. AvalonBay Communities
4. BRE Properties
5. Equity Residential
Interactive Chart: Press Play to compare changes in analyst ratings over the past two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.