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White Paper: An Investment Case for Housing REITs: Economic Indicators & The Strength of Multifamily

Investment Guides
September 04, 2025•2 min read

  • For decades, real estate investment trusts (REITs) have proven themselves by providing a reliable income vehicle with growth and inflation protection, a savings solution for the future or retirement.

  • Housing-focused REITS are well-positioned to unlock investment-grade real estate for tax-advantaged income and competitive total returns in 2025 and beyond.

The Necessity of Housing

While some asset classes fluctuate in demand, people always need a place to live.

Household formation has grown steadily since 2021, with over 800,000 net renter households formed in 2024 alone.

  • The number of renters moving out to buy a home are at a record low.

  • The percentage of 30-year-olds who own a home (33% in 2024) is dramatically down from the average 50 years ago (47% in 1984).

  • In 2025, owning a home costs approximately 25% more than renting one – the biggest gap in 15 years.

Apartment Demand Chart

REIT Performance Data Makes Its Case

Early 2025 NAREIT data demonstrates the potential outcomes of REIT investments:

NAREIT Performance Data

REITs benefit from the acquisition of high-performing properties and portfolio-wide operational management, driving strong occupancy, which supports predictable cash flow.

Public vs Private Real Estate Performance Chart

  • Rental growth is rebounding in most markets: Approximately 94% of U.S. markets assessed by CoStar saw an increase in quarter-over-quarter rent growth in early 2025.

  • Rental rate performance correlates with vacancy shifts: While vacancy levels rose every quarter from late 2021 through the end of 2024, 2025 saw vacancy rates begin to decline across the U.S. multifamily sector.

Why Invest in a Housing REIT Now?

  • Competitive total returns based on steady dividends and long-term appreciation

  • Inflation protection and capital preservation

  • A low correlation with other assets and the stock market

  • Reduced risk from diversification across properties and geographic locations

What’s Next for America’s Housing Crisis?

Even after a glut of new multifamily supply in recent years, demand for housing remains strong across most markets. Moreover, between 1.34 million to 1.56 million new homes per year will be needed to meet demand through 2034.

Pandemic-era migration patterns are settling from their heights, but Americans are continuing to migrate to the Sun Belt because of the region’s affordability, strong job growth and friendly business climate.

Net Domestic Migration Chart

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This article originally appeared on Capital Square's website.

MultifamilyDelaware Statutory Trust1031 Exchange1031 Exchange DSTREIT
Gerald F. "Jerry" Baker, III founded Baker 1031 Investments after a career on Wall Street, where he worked for some of the world's largest institutional real estate private equity, and hedge funds. Prior to starting the firm, Jerry was directly involved in over $10 billion of real estate transactions worldwide. Drawing on the knowledge gained from managing large institutional property portfolios, he adapted these strategies to meet the specific needs, resources, and goals of his own family's real estate portfolio. After proving the success of these strategies, he founded Baker 1031 Investments to make them available to you and your family.

Jerry Baker

Gerald F. "Jerry" Baker, III founded Baker 1031 Investments after a career on Wall Street, where he worked for some of the world's largest institutional real estate private equity, and hedge funds. Prior to starting the firm, Jerry was directly involved in over $10 billion of real estate transactions worldwide. Drawing on the knowledge gained from managing large institutional property portfolios, he adapted these strategies to meet the specific needs, resources, and goals of his own family's real estate portfolio. After proving the success of these strategies, he founded Baker 1031 Investments to make them available to you and your family.

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The information herein has been prepared for educational purposes only and does not constitute an offer to purchase or sell securitized real estate investments. Such offers are only made through the Sponsor’s Private Placement Memorandum (PPM) which is solely available to accredited investors and accredited entities. DST 1031 properties are only available to accredited investors (generally described as having a net worth of over $1 million dollars exclusive of primary residence) and accredited entities only. If you are unsure if you are an accredited investor and/or an accredited entity, please verify with your CPA and Attorney.

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