In this article, we will look at the 10 Best Residential REITs to Buy in 2026.
Residential REITs are getting more attention as the housing market remains difficult for buyers but still supportive for landlords. Elevated home prices, limited affordability, and a slower new-supply pipeline are keeping many households in the rental market for longer.
Principal Asset Management labels U.S. residential real estate as “High conviction,” saying “Fundamentals are improving as new supply has fallen to trend and demand is accelerating.” Nuveen makes a similar point, arguing that “Demographic shifts make living sector favorable” and that “U.S. apartment sector fundamentals are strengthening as new supply growth moderates.” In summary, the setup is less about a sudden housing boom and more about supply pressure easing at a time when rental demand remains intact. Janus Henderson adds that “REITs are in early recovery mode,” and “Valuations are at multi-decade lows” despite “consistent earnings growth and attractive dividend yields.” That gives the sector a valuation angle as well, not just a rent-growth story.
Against this backdrop, residential REITs deserve a closer look in 2026. The more interesting names are those with exposure to stronger rental markets, limited new supply, steady occupancy, and room for earnings growth. With that in mind, let’s take a look at the 10 Best Residential REITs to Buy in 2026.
Our Methodology
We used the Finviz screener to identify Residential REITs that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.
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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
10. AvalonBay Communities, Inc. (NYSE:AVB)
On May 20, 2026, Bloomberg reported that AvalonBay Communities, Inc. (NYSE:AVB) and Equity Residential are nearing a potential merger agreement that would combine two of the largest REITs by market value. AvalonBay currently has a market capitalization of about $26B, while Equity Residential is valued at roughly $24.8B.
On May 14, 2026, Scotiabank analyst Nicholas Yulico lowered the firm’s price target on AvalonBay Communities, Inc. (NYSE:AVB) to $187 from $190 and maintained a Sector Perform rating on the shares. The firm said it expects a slower recovery across Sunbelt apartment markets, estimating that excess supply from recent overbuilding could take several years to absorb.
Barclays also lowered the firm’s price target on AvalonBay Communities, Inc. (NYSE:AVB) to $203 from $206 while reiterating an Overweight rating. The firm updated its residential REIT models following Q1 earnings reports and said it believes apartment and single-family rental earnings growth could bottom in 2026, with share prices already reflecting much of that weakness.
Last month, AvalonBay Communities, Inc. (NYSE:AVB) reported Q1 core FFO of $2.83 per share, versus the consensus estimate of $2.80. Same-store residential revenue increased 1.6% year over year to $703.98M, while same-store residential operating expenses rose 4.7% to $224.04M. Same-store residential NOI increased 0.2% to $479.94M during the quarter.
AvalonBay Communities, Inc. (NYSE:AVB) is an equity REIT focused on developing, acquiring, redeveloping, and managing apartment communities across major U.S. metropolitan markets.
9. UDR, Inc. (NYSE:UDR)
On May 14, 2026, Scotiabank lowered the firm’s price target on UDR, Inc. (NYSE:UDR) to $38 from $39 and maintained a Sector Perform rating on the shares. The firm said it updated its outlook for U.S. multifamily REITs and continues to expect a slower recovery across Sunbelt apartment markets, where excess supply from recent overbuilding could take several years to absorb.
On May 11, 2026, Barclays lowered the firm’s price target on UDR, Inc. (NYSE:UDR) to $41 from $42 while maintaining an Overweight rating on the shares. The firm updated its residential REIT models following first-quarter earnings reports and said it expects apartment and single-family rental earnings growth to bottom in 2026, adding that REIT share prices may have already largely reflected that slowdown.
Last month, UDR, Inc. (NYSE:UDR) reported Q1 FFO as adjusted of 62c per share, in line with the consensus estimate. Revenue totaled $425.85M, versus the consensus estimate of $426.58M. Chairman, President, and CEO Tom Toomey said first-quarter same-store and FFOA results were generally in line with expectations, while the company continued using its capital allocation strategy to create shareholder value through property sales and stock repurchases. Management also announced that UDR became the first residential REIT to begin offering monthly dividends, a move the company said is intended to broaden investor access and align with growing interest in monthly income distributions.
UDR, Inc. (NYSE:UDR) is a multifamily REIT focused on owning, managing, acquiring, developing, and redeveloping apartment properties across targeted U.S. markets.
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