Over the past several months, the market for initial public offerings of mortgage real estate investment trusts has increased significantly. Demand for REITs, it seems, are at an all-time high. In fact the industry has developed into a $1 trillion market with $300 billion in the U.S. and another $700 billion elsewhere, according to the National Association of Real Estate Investment Trusts. According to figures reported by the Royal Bank of Scotland, about $9 billion of equity capital has been raised this year by publicly traded mortgage REITs, according to data from mid-April. This number is focused heavily on residential real estate with the equity raised more than in any other full year. This $9 billion of equity translates into $54 billion of buying power that is likely to further translate into significant demand for existing mortgage-backed securities.
Is now the right time for REITs?
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