In this article, we will take a look at the best residential REITs to buy in 2025.

The US housing market is most likely to lag through 2025, according to JP Morgan, with home price growth expected to remain below 3%. Existing home sales are at an all-time low, and although inventory is slowly increasing, it’s still below average. While underbuilding is often blamed for supply issues, long-term data suggests that new household formations and housing completions have mostly balanced out over the past 30 years. Even so, home prices are expected to grow modestly. That is largely due to the wealth effect: homeowners with strong equity positions and renters with gains from the stock market are helping sustain prices, despite broader affordability challenges.

The U.S. housing market remains stuck in a prolonged slowdown through 2025, with new data from the National Association of Realtors (NAR) highlighting ongoing weakness. Business Insider reported that pending home sales dropped 0.8% from May to June and declined 2.8% year-over-year, reflecting continued buyer hesitation. While housing inventory has increased, many sellers are choosing to withdraw listings rather than reduce prices. This has kept home prices at record highs, worsening affordability, particularly for first-time and younger buyers.

The real estate sector is under pressure from rising interest rates, increasing construction costs, and stricter regulatory requirements, according to Jonathan Rose, CEO of the Jonathan Rose Companies. Despite these challenges, recent federal legislation has provided developers with renewed support by expanding the Low-Income Housing Tax Credit (LIHTC). The bill increases states’ 9% credit allocation by 12% and eases financing requirements. These measures are expected to accelerate affordable housing development. While the US still faces a significant housing shortage, estimated at around 10 million units, Rose sees the bill as a meaningful step forward and an opportunity for impact-focused investment.

However, concerns remain over a proposed $27 billion cut to federal rental assistance, which has already prompted some lenders to scale back. Rose remains cautiously optimistic, noting bipartisan support in Congress for affordable housing.

With this outlook in mind, let’s take a look at some of the best residential REITs to buy in 2025.

Our Methodology 

We used the Finviz stock screener to filter residential REIT stocks. The 10 chosen stocks were some of the best residential REITs that also received positive coverage from Wall Street analysts and mainstream media outlets recently. These stocks were favored by top hedge funds in the first quarter of 2025 as well, as per Insider Monkey’s Q1 2025 database.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

10. UMH Properties, Inc. (NYSE:UMH)

Number of Hedge Fund Holders: 10

UMH Properties, Inc. (NYSE:UMH) is one of the best residential REITs to buy. In the beginning of July, UMH revealed operating results for the second quarter of 2025. The REIT made progress in both operations and finances, turning 188 homes from its inventory into rental units that now generate income. This brought the total number of rental homes to around 10,600, with a high occupancy rate of 94.4% in Q2. In addition, UMH’s same-property occupancy rose by 76 units during the second quarter and by 251 units over the past year, reaching 88.2%.

UMH Properties, Inc. (NYSE:UMH) also saw a boost in home sales, with gross sales revenue increasing to $10.3 million, up from $8.8 million last year. Given the higher occupancy and rent increases throughout 2024 and into 2025, same-property rental and related charges for July 2025 rose by 9.2% compared to July 2024. Overall rental and related charges for the second quarter came in at $55.9 million, up 8.5% from $51.5 million the year before.

UMH also refinanced ten of its communities, which have about 2,000 sites, under a Fannie Mae credit facility. This refinancing provided $101.4 million at a fixed interest rate of 5.855%. The certified appraisal valued these properties at $163.5 million or about $82,000 per site. Since UMH invested $66.6 million in these communities, their value has gone up by about $96.9 million, or 146%, which shows the properties have appreciated a lot.

The company also sold around 1.8 million shares of common stock through its At-the-Market program. These shares sold at an average price of $17.60, raising about $31.0 million in total.

President and CEO of UMH Properties, Samuel A. Landy, commented:

“Our communities continue to experience strong demand which we are converting into occupied sites through our rental home and sales programs. We are proud to announce that our second quarter sales set a new quarterly sales record.”

UMH Properties, Inc. (NYSE:UMH) is a real estate investment trust that was founded in 1968. It owns and operates manufactured home communities across 12 states, with around 26,000+ homesites, including rental homes and self-storage units.