T
he US housing market entered 2025 with mixed signals. While active listings increased by 12.1% in November compared to the previous year, many of these homes had been on the market for over 60 days without selling. This is the highest share since 2019. Mortgage rates have averaged above 6% for two years, and buyers don't expect a significant drop. As mortgage interest rates rose at the end of December, mortgage demand declined. The Mortgage Bankers Association reported a 21.9% decrease in total mortgage application volume for the two weeks ended December 27 compared to the previous period.

    Mike Fratantoni, chief economist at the Mortgage Bankers Association, noted that higher mortgage rates led to declines in both refinance and purchase applications. Bess Freedman, CEO of Brown Harris Stevens, pointed out a troubling trifecta of rising rates, inventory, and prices for 2025. She expects the new year to be turbulent and volatile for real estate, despite public certainty with the president's leadership.

    Our methodology involves using a stock screener to create an extended list of relevant companies with high market caps. We then shortlist the top 12 stocks with the highest number of hedge fund holders. These 12 best real estate and realty stocks are arranged in ascending order of their hedge fund holdings as of Q3. At Insider Monkey, we focus on stocks that hedge funds heavily invest in, as our research has shown that imitating top stock picks can outperform the market.