The Role of Real Estate Investments in a Portfolio

By Jeremy Pagan for Morningstar

Investor confidence in real estate reached unprecedented levels in 2022, owing to home price appreciation and higher yields for other asset classes, such as REITs, in low-rate environments.

From the start of the pandemic in January 2020 through September 2022, the median sale price for existing homes and new houses in the United States each rose by more than 43%, and rental prices rose by 11%. In the past year, home sellers profited upward of $94,000, which was a 45% increase on investment returns from 2020 and a 71% increase from 2019. Those who owned multifamily properties during the pandemic were able to capitalize on this consistent double-digit rent growth over the past few years.

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