REITs typically pay high dividends and are sensitive to rising interest rates because many depend on borrowed money to expand their holdings. Property owners using longer-term loans, such as health care facilities, suffer most when interest rates rise quickly because they are locked in to long-term agreements.
A home-equity line of credit allows homeowners to draw on the value of their homes as needed, usually at a variable interest rate. A home-equity loan is taken as a lump sum, usually at a fixed rate. When interest rates rise, lines of credit and home equity loans may offer clients a less expensive way to obtain cash compared to taking out a mortgage.
According to a June 2013 WSJ article, U.S. household net worth was $70.3 trillion, surpassing its previous 2007 high point. This is the highest amount in nominal terms since the Federal Reserve began such recordkeeping in 1945. The figures are not adjusted for inflation or population growth. Adjusted for inflation and population growth, Americans’ net worth remained ~ 11% below the peak level reached in the third quarter of 2007.
For the past few years, nontraded REITs have been on FINRA’s annual list of products that could be too risky for many investors. During May 2013, FINRA came out with new standards to be used when marketing and describing nontraded REITs to clients and prospects. Roughly $62 billion is invested in nontraded REITs that are publicly registered. The dollar amount invested in nontraded REITs that are not publicly registered is unknown.
According to Remodeling magazine, certain high-end home-improvement projects have a better payoff when it comes time to sell, as shown in the 2013 table below.
Amount Recouped When Home Is Sold 
By the end of March 2013, housing markets across the U.S. had seen substantial improvements in home prices from a year earlier. The S&P/Case-Shiller indexes below show returns over the past 12 months (March 2012 to March 2013) plus the overall loss from the housing market’s peak in late 2006.
U.S. Metropolitan Home Prices
[from March 2012 to March 2013 + since 2006 peak]
For the 16 quarters ending with the first quarter of 2013, equity REITs outperformed the S&P 500 in 11 of those quarters. Since stocks hit bottom in 2009 (through the first quarter of 2013), the Dow Jones Equity All REIT Index, which tracks 137 REITs, returned 233%, compared to 153% for the S&P 500 over the same period.
Home prices in the U.S. were ~ 2.9 times incomes from 1985 to 2000. This price-to-income ratio peaked at ~ 5.1 in 2005; as of early 2013, prices were ~ 3.3 times national incomes (~ 14% > historical trend).
Due to the cumulative losses of residential real estate from 2007 to the present, some investors are receiving 1-2% of their purchase price from renters each month. Generally, one should expect about half that range (or $500 to $600 per month for a $100,000 home) during "normal" periods of appreciation. In a 2012 article, The Wall Street Journal listed six traps that investors in rental properties often fall victim to: