Real estate stocks gain as the Blue Wave sends Treasury yields lower

Real estate stocks were gaining as the Democrats sweep of Congress in the U.S. midterm elections sent the longer-term Treasury yields down.

Tuesday's midterm results reflected voter frustration over rising prices, the Iran war, and government corruption. The party is positioning itself for an aggressive oversight agenda targeting the Trump administration and powerful special interests.

United States 10-Year Bond Yield US10Y hit its lowest level in about two months this week as a collapse in crude oil prices and the midterm elections drained stagflation fears and deficit anxiety, according to a recent report by Investing.com.

Housing-related stocks surged as the elections reignited hopes of several issues plaguing the housing market getting addressed, according to CNBC News.

"Democratic control of Congress raises the potential for lower tariffs, which we estimate represent ~$7,500 of additional cost per home, a de-escalation of the conflict in the Middle East, and a less restrictive approach to immigration policy," UBS reportedly said.

The potential legislations to keep an eye on include the More Homes on the Market Act: a bipartisan bill that would double capital gains exclusions, and the First Home Affordability Act: a 10% first-time homebuyer tax credit, the report noted.

The S&P 500 Real Estate Index Sector (SP500-60) increased 1.88% week-over-week to 280.25 points, while the accompanying State Street Real Estate Select Sector SPDR ETF XLRE was up 1.92% to $44.00.

The Dow Jones REIT Indx Equity REIT Total Return Index and the FTSE Nareit All Equity REITs index added 1.88% during the course of the week.

Meanwhile, Wall Street's major indexes went from cheerful optimism after the 2026 midterm elections to experiencing their worst day in over a year and a half. The indexes saw severe weekly losses from an ongoing technology selloff and policy fears related to AI.

Weekly Winners & Losers

Among largecap stocks, American Healthcare REIT AHR led the winners, adding 8.20% to close the week at $57.91. The health care REIT exceeded analyst estimates in terms of third-quarter earnings and revenue.

Equity LifeStyle Properties ELS followed with a 6.64% weekly gain to $62.95.

Iron Mountain IRM (-8.61% W/W to $106.52) topped the decliners despite Q3 earnings surpassing expectations amid a disappointing Q4 guidance.

Data center REITs were declining as the U.S. data center boom faces a fresh political hurdle. The newly elected governors have promised to halt or pause construction across several states, putting a substantial portion of planned development under scrutiny.

Digital Realty Trust DLR (-3.60% W/W to $174.20) was the next major loser in the category.

Park Hotels & Resorts PK topped the midcap losers, retreating 5.18% to close the week at $15.74. The REIT posted disappointing financial results this week.

OUTFRONT Media OUT (-3.78% W/W to $30.79) followed, with Q3 earnings missing the mark. For the gainers, Compass COMP (+13.44% W/W to $10.21) led the pack in the wake of its Q3 results.

Janus Living JAN (+12.17% W/W to $31.99) extended its post-earnings rally with the launch of a public offering of 25M shares of its class A-1 common stock.

Among smallcap stocks, Fermi FRMI (-39.85% W/W to $1.57), Opendoor Technologies OPEN (-22.22% W/W to $1.40), AGNT AGNT (-20.10% W/W to $3.10), Medical Properties MPT (-19.56% W/W to $1.81), American Realty ARL (+21.79% W/W to $22.47), Community Healthcare CHCT (+12.63% W/W to $14.71), and Brandywine Realty Trust BDN (+8.72% W/W to $3.24) were the notable movers.

Here is a look at the subsector performances for the week: