5 Top-Rated Housing Stocks With Long-Term Growth Potential

Housing stocks have struggled as a red-hot market cools, but these Buy-rated picks could be worth a closer look.

housing stocks with image of subdivision homes
(Image credit: Getty Images)

Housing stocks are under pressure from the Federal Reserve's plan to aggressively hike interest rates as a means of killing inflation. And as a result, some of the price appreciation experienced over the past decade in U.S. housing markets – as well as in housing stocks – has begun to unravel.

"The Fed is determined to cool inflation, and they're willing to throw housing under the bus to do so," Devyn Bachman, senior vice president of research at John Burns Real Estate Consulting, said recently, as reported by Realtor.com (opens in new tab). "When you raise [mortgage] rates to the point they're at today, it breaks the back of housing."

Despite the short-term pain the housing market is experiencing, there are still opportunities for investors, particularly those with a long-term outlook.

"While the macroeconomic backdrop and tougher comps in the back half of 2022 are headwinds, we continue to see the single-family REITs [real estate investment trusts] likely benefiting from strong industry fundamentals," says Credit Suisse analyst Sam Choe. "The overall affordability picture indicates renting continues to be the more attractive option vs. owning a home, contributing to strong demand for rentals and good leasing momentum late into peak leasing season." 

Choe adds that single-family rental firms are "operating from a position of strength" thanks to high occupancy rates and are "set up nicely to still post strong rental rate growth in the second half of 2022 and into 2023."

With that in mind, here are five housing stocks set for long-term growth. The names featured here all have their hands in the single-family rental market and could continue to benefit from strength in this market. What's more, each boasts a healthy dividend yield and are well-liked by Wall Street analysts. 

Data is as of Nov. 7. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price. Analyst ratings are courtesy of S&P Global Market Intelligence. Stocks are listed in reverse order of analysts' consensus recommendation.

Will Ashworth
Contributing Writer, Kiplinger.com

Will has written professionally for investment and finance publications in both the U.S. and Canada since 2004. A native of Toronto, Canada, his sole objective is to help people become better and more informed investors. Fascinated by how companies make money, he's a keen student of business history. Married and now living in Halifax, Nova Scotia, he's also got an interest in equity and debt crowdfunding.