Yesterday’s announcement on job creation in the private sector was very disappointing, showing a loss of 32,000 jobs while the consensus predicted a gain of 5,000. Despite the negative news for the economy, the stock markets still closed higher.
Weakness in the U.S. labor market has bolstered expectations of a rate cut at its meeting next Wednesday, which is supportive for stocks. Additionally, signals suggest the Fed will likely continue its easing measures through 2026, with at least one additional rate cut expected before mid-year.
Some sectors will likely benefit more than others from the Fed’s rate cuts. Real estate is frequently cited as one of the biggest beneficiaries, as real estate transactions often rely on credit, which becomes cheaper when rates fall.
Real estate stocks become particularly attractive in a falling interest rate environment because they typically offer stable dividends, providing significant passive income as yields on bonds and money market instruments decline.
Investing in real estate stocks in December could be a smart way to close out 2025 and start 2026 on a good note.
So, using the Investing.com filterwe went looking for opportunities in American real estate stocks. Here are the exact parameters we used for our research:
In this research, we used InvestingPro metrics, including Fair Value and Health Score, which are only available to InvestingPro subscribers with a PRO+ plan. Fair value provides an average of several recognized valuation models for each stock, while health score evaluates several financial metrics to measure the overall strength of a company.
We were thus able to identify 9 opportunities:
InvestingPro’s fair value estimates indicate that these U.S. real estate stocks are undervalued by 16.7% to 63.5%, while analysts see upside potential of 15.5% to 34%.
All of these stocks also offer attractive dividend yields, ranging from 6.2% to 13.5%.
Beyond real estate, there are other opportunities in a falling rate environment. Small-cap stocks, which rely more on bank loans than larger companies, are often cited as the biggest beneficiaries of…
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