Real estate finishes in green as bullish sentiment ticks up across all indices

Real estate finished in green as Nvidia earnings, the biggest macro event of the week, helped the tech stocks rally and ticked up bullish sentiments across all major market averages.

S&P 500 gained 1.66% during the course of the week to finish at $5,088.80, while the Dow Jones Industrial Average Index increased by 1.30% to end at $39,131.53. The NASDAQ Composite Index rose 1.40% to $15,996.82.

The Real Estate Select Sector SPDR ETF (NYSEARCA:XLRE) gained 0.96% from last week, boosted by a 2.79% increase in Hotel & Resort REITs and 1.91% rise in Specialized REITs.

Optimism prevailed despite apprehensions about a near-term rate cut by the Federal Reserve. Goldman Sachs' economics research team pushed back its expectation of the first interest rate cut to June from May, in the wake of comments this week from central bank officials and the minutes of the January monetary policy committee meeting.

"I would like to have greater confidence that inflation is converging to 2 percent before beginning to cut the policy rate," Fed Governor Lisa Cook said on Thursday in prepared remarks.

Other macro events also failed to spark enthusiasm among real estate stock investors. Long-term mortgage rates are nearing 7% mark, impacting the housing market, according to the Freddie Mac Primary Mortgage Survey. Meanwhile, a recent report had said that the U.S. existing home sales slipped from a year ago, and in general, the home sales remain sizably lower than a couple of years ago. On the better side, initial jobless claims unexpectedly fell in the past week, while the New York Fed inflation expectation report showed that the three-year inflation expectations fell to its lowest level since 2013.

XLRE saw net outflows worth $19.19M during the course of this week, compared to inflows worth $147.22M, according to the data solutions provider VettaFi.

On the earnings side, real estate had something to cheer about. Public Storage (PSA), CoStar Group (CSGP), Medical Properties Trust (MPW), National Health Investors (NHI), Iron Mountain (IRM), Pebblebrook Hotel (PEB), Vici Properties (VICI), Americold Realty Trust (COLD), Ryman Hospitality Properties (RHP), Starwood Property Trust (STWD), Apple Hospitality REIT (APLE), CTO Realty Growth (CTO) and RE/MAX Holdings (RMAX) posted quarterly earnings that surpassed Wall Street expectations.

Meanwhile, Realty Income (O), Sunstone Hotel Investors (SHO), eXp World (EXPI) and DiamondRock Hospitality Company (DRH) posted better-than-expected revenue, though weaker-than-expected FFO.

IRM, CSGP, Alexandria Real Estate Equities (ARE) and VICI were the top-performing S&P 500 real estate stocks of the week.

Here is a look at the real estate subsector performance: