real estate sector

Real estate shares are falling as bond yields climb, raising borrowing costs and making property stocks less attractive to investors. At the same time, money is rotating out of the sector and into technology shares, which investors see as offering better growth prospects. The shift is weighing on real estate valuations across global markets.

Real estate stocks slumped as rising bond yields increased pressure on the interest-rate-sensitive sector, with investors rotating money into technology shares. Higher yields raise borrowing costs and make real estate's dividend returns less attractive relative to bonds. The real estate select sector fund declined as capital moved toward tech, reversing some of the sector rotation seen earlier in the year.

A slowdown in the housing market is spreading beyond real estate agencies, hitting businesses that don't sell houses themselves. Companies tied to home sales — furniture retailers, contractors, movers and lenders — are reporting reduced demand as fewer transactions take place. The ripple effect shows how a housing downturn affects far wider parts of the economy than the property sector alone.