Rising Interest Rates and the Agony in REIT ETFs

The real estate market is known for its large booms and busts that happen over time. The bust of 2008 still looms in recent memory and many homeowners are just now swimming up from being underwater on their home loans. These booms and busts in the real estate market are not random, however, because they are driven by credit. Many players in the real estate market require credit to develop, build and purchase homes. Changes in the credit markets, or interest rates, can thus increase or decrease the speed of real estate expansion.