When the stock market gets choppy, residential real estate starts to look extra appealing. This is because the sector has a built-in appeal for investors: People need somewhere to live regardless of what the stock market is doing.
This doesn’t make residential real estate immune to economic pressure, of course. This year, the sector is being shaped by three primary drivers: employment growth, interest rates and housing policy, according to John Kim, managing director of U.S. real estate for BMO Capital Markets.
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Unusually weak employment growth last year has created a headwind for the sector. “While the monthly job growth this year has shown some encouraging signs, it’s still well below the robust pace we’ve seen over the past decade,” Kim says.
Interest rates are also top of mind for investors as they influence property values and transaction pricing. Meanwhile, policy initiatives such as rent control and the ROAD to Housing Act — a federal housing affordability bill that could affect housing supply, manufactured housing and institutional ownership of single-family homes — are creating uncertainty across the sector.
Still, “most of the publicly traded residential companies have strong balance sheets, well-regarded management teams and operational leverage,” Kim says.
One of the best and most cost-effective ways to get exposure to that valuable asset class is by buying real estate investment trusts, or REITs, that specialize in rental housing. Residential REITs are professionally managed by seasoned industry experts who have specialized knowledge in the field. Individual REITs can own hundreds of properties over a wide geographic area, providing retail investors with a level of diversification they couldn’t otherwise achieve. REITs also trade on major stock exchanges, making them far more accessible than buying rental property directly.
A major selling point for REITs is their income potential. By law, REITs must distribute at least 90% of their taxable income to shareholders as dividends. Shares can also appreciate over time if cash flow and property values rise, but the dividend component is often a major part of the investment appeal.
The key to residential REIT investing in 2026 is selectivity. Kim sees particular strength in San Francisco and New York, where artificial intelligence-related job growth and limited supply favor coastal apartment REITs like AvalonBay Communities Inc. (ticker: AVB), Equity Residential (EQR) and Essex Property Trust Inc. (ESS).
In a more uncertain job market, he also likes manufactured housing REITs like Equity LifeStyle Properties Inc. (ELS) and Sun Communities Inc. (SUI). These offer lower-cost housing options and have delivered positive organic growth through multiple cycles. If job growth accelerates meaningfully, Kim says Sun Belt apartment REITs like Mid-America Apartment Communities Inc. (MAA) could become more attractive as well.
Here are seven of the best residential REITs to buy today:
| REIT | Forward Dividend yield |
| AvalonBay Communities Inc. (AVB) | 3.9% |
| Equity Residential (EQR) | 4.3% |
| Essex Property Trust Inc. (ESS) | 3.8% |
| Equity LifeStyle Properties Inc. (ELS) | 3.5% |
| Sun Communities Inc. (SUI) | 3.4% |
| Mid-America Apartment Communities Inc. (MAA) | 4.7% |
| Invitation Homes Inc. (INVH) | 4.1% |
AvalonBay Communities Inc. (AVB)
AvalonBay is a $31 billion residential REIT that owns and operates upscale apartment communities in major metro areas across the U.S. The company has a particular focus on New York, Boston, Seattle and California, but is also expanding into Sun Belt metros in North Carolina, Florida and Texas. That mix gives it exposure to markets where housing is expensive and demand is relatively constant.
AvalonBay builds communities, not just apartment buildings. It’s known for offering new units with premium features like fitness centers, pools, smart technology and open community spaces.
The company has been in the spotlight recently because of merger discussions with Equity Residential. Kim says the operational benefits may not be especially meaningful, but the larger, combined company could have more room to invest in AI, data analytics and proprietary revenue management.
Forward yield: 3.9%
Equity Residential (EQR)
Equity Residential is the other side of the AvalonBay merger. This apartment REIT focuses on high-income rental markets. It owns and manages more than 300 properties and 85,000 apartment units, primarily in major coastal markets but with a target presence in high-growth metro areas like Atlanta, Austin, Dallas, Fort Worth and Denver.
That geographic mix is timely. The REIT’s first-quarter 2026 results show what Kim already predicted: Demand in San Francisco and New York is going strong. These two areas drove quarterly operating performance that exceeded expectations. Equity Residential’s president and CEO Mark Parrell notes that new apartment supply levels are expected to decline across all of the company’s markets, which sets up Equity Residential “for pricing power in the latter half of the year.”
After the merger with AvalonBay, the combined company will have the scale to compete with larger players and attract a wider range of investors, Kim says.
Forward yield: 4.3%
[Read: 7 Best REIT ETFs to Buy for 2026]
Essex Property Trust Inc. (ESS)
Essex Property Trust is a more regionally focused apartment REIT, and that is part of the appeal. The company specializes in West Coast apartment markets, including Northern and Southern California and Seattle. That concentration can make ESS less diversified than some peers, but it also gives investors a cleaner way to invest in some of the country’s most supply-constrained housing markets, especially as AI-related job growth brings in more residents.
The company acquires, then develops and manages multifamily communities in these supply-constrained markets. It currently has an ownership stake in 259 apartment communities with more than 63,000 apartments in total. It’s also part of the S&P 500 and a Dividend Aristocrat™ thanks to 32 consecutive annual dividend increases as of May 2026.
So, if you’re looking for a coastal apartment REIT with West Coast leverage that can provide steady income, ESS is worth a look.
Forward yield: 3.8%
Equity LifeStyle Properties Inc. (ELS)
Equity LifeStyle Properties takes a very different approach than the aforementioned REITs. Instead of targeting high-income areas, Equity LifeStyle focuses on manufactured home communities, RV resorts and campgrounds. These properties can appeal to both residents and vacationers, giving the REIT a unique mix of demand sources. It currently operates 453 properties, including 224 RV resorts and campgrounds, 206 manufactured home communities and 23 marinas.
Kim is bullish on manufactured-home REITs like ELS because they cater to retirement-age residents. They can also help support demand when other areas become less affordable. The company reported a 5.7% increase in manufactured-home rental income in the first quarter of 2026 compared with Q1 2025.
Forward yield: 3.5%
Sun Communities Inc. (SUI)
Sun Communities is another major manufactured-home REIT that also owns and operates RV properties. This gives it exposure to both affordable housing demand and outdoor vacation trends. It currently has around 179,000 sites across 515 communities, including 295 manufactured home communities and 166 RV communities in the U.S. It also has 54 parks in the U.K. and owns about 48,000 wet slips, docks and dry boat storage spaces along popular lakes and waterways.
Like Equity LifeStyle, Sun Communities may be appealing in a rougher labor market. The company’s first quarter 2026 results showed resiliency with North American manufactured home and RV site occupancy largely unchanged from the same period last year at around 98%. Net operating income also increased 6.3% in these areas. For housing exposure with a defensive tilt, Sun Communities is worth considering.
Forward yield: 3.4%
Mid-America Apartment Communities Inc. (MAA)
Mid-America Apartment Communities, or MAA, is one of the clearest ways to bet on the Sun Belt apartment market. The company’s portfolio is primarily across high-growth Sun Belt markets, where it owns and operates nearly 300 properties across 16 states and the District of Columbia.
Sun Belt exposure can cut both ways, however, as some markets have had to work through elevated apartment supply. This can limit landlords’ abilities to raise rents in the near term, but if job growth improves, Kim says MAA could become more attractive.
First quarter 2026 shows positive results for the REIT. It marked the fifth consecutive quarter of improving year-over-year rent performance, according to company president and CEO Brad Hill. The company also had historically low resident turnover in the past 12 months, which bodes well for income continuity. This continuity translates to literal dividends for investors: MAA just announced its 130th consecutive quarterly dividend. It has never reduced or suspended its dividend in the 30 years it’s been a publicly traded company. So, if stable income is a primary driver, this may be the REIT for you.
Forward yield: 4.7%
Invitation Homes Inc. (INVH)
Invitation Homes offers another twist on residential REITs. It doesn’t own or manage apartment buildings; instead, it buys detached single-family homes, rehabs them and then rents them out at premium rates.
This REIT’s portfolio focuses on the western and southeastern U.S., where it looks for neighborhoods with convenient access to major employment centers, good schools and transportation. More than 110,000 people live mortgage-free in Invitation Homes.
INVH is a component of the S&P 500. Its first quarter 2026 results were steady, if not especially flashy. It had strong revenue growth of 8.8% year over year, but core funds from operations (FFO) remained flat for the quarter. Still, the fact that management recently repurchased roughly $439 million of shares in addition to approving another $500 million in April suggests it has confidence in the company and believes its stock is a good use of capital at the current price.
Forward yield: 4.1%
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7 of the Best Residential REITs to Buy in 2026 originally appeared on usnews.com
Update 06/01/26: This story was previously published at an earlier date and has been updated with new information.
