10 Most Undervalued Real Estate Stocks To Buy According To Analysts

4. Redwood Trust, Inc. (NYSE:RWT)

Average Upside Potential: 23.64%

Forward P/E: 8.69

Number of Hedge Fund Holders: 12

Redwood Trust, Inc. (NYSE:RWT) is a leading specialty finance company that has been enabling access to housing opportunities for American homebuyers and renters since 1994. The company invests in mortgages for single-family and rental properties. Additionally, it acquires, sells, and securitizes residential loans and offers a steady source of liquidity to the owner-occupied and rental markets. The firm operates its business in three segments including Sequoia Mortgage Banking, CoreVest Mortgage Banking, and Redwood Investments.

Redwood Trust, Inc. (NYSE:RWT) has served as a leading provider of capital to parts of the residential housing market not well-served by government programs for 30 years. Amidst elevated mortgage rates and a limited housing supply, Redwood is witnessing a growth in demand from its loan sellers for non-traditional loan products. Looking into 2025, the management believes that the housing policy and regulation are going to change under the new admin but expects most of it to benefit the company.  The firm is also positioning itself as a preferred partner to its bank loan sellers, with $3.8 billion FY’24 loans locked with banks.

Redwood Trust, Inc. (NYSE:RWT) favors from the strength of its operating businesses which are delivering increased efficiency. In the fourth quarter alone, Sequoia locked $2.3 billion of loans, up 4% quarter-over-quarter. Meanwhile, CoreVest funded $501 million of loans, a 9% rise from the preceding quarter. Simultaneously, Redwood Investments deployed $81 million of capital into accretive internally sourced and third-party investments.