US REITs and Vonovia show diverging performance amid interest rate shifts

Real estate investment trusts (REITs) in the United States are showing resilience against rising interest rates, diverging from traditional economic models. According to reports from Cohen & Steers and Hoya Capital, the correlation between REIT returns and 10-year US Treasury yields has reached its lowest level in approximately four years. US REITs saw a gain of 12 percent through mid-September 2026, despite higher bond yields.

In contrast, the German residential real estate company Vonovia is facing significant pressure. Unlike the US market, the German sector is heavily impacted by rising interest rates, as evidenced by the 10-year Bund yields reaching 15-year highs in late August. Vonovia is struggling with financing and sales, compounded by political debates in Berlin regarding the socialization of housing.