3 U.S. Mortgage REIT Stocks Worth Watching While Rates Stay Above 7%

Mortgage rates above 7%, a Fed leaning toward more hikes, and a housing market starved of supply have turned the mortgage corner of Wall Street into a pressure cooker. That mix can punish some stocks yet create unusual openings for others as funding costs, book values, and dividend resilience are tested in real time. This article walks through three U.S. mortgage REIT and residential finance stocks that screens suggest could be positioned on the positive side of that tension.

The three stocks highlighted below are just a sample, since the full screen surfaced 21 more U.S. mortgage REIT and residential finance companies with equally solid storylines that are not covered in this article. If you want to move beyond these examples and identify your own highest conviction ideas, head straight into the U.S. Mortgage REITs and Residential Mortgage Finance screener to filter and analyze the broader opportunity set.

Orchid Island Capital (ORC)

Overview: Orchid Island Capital is a residential mortgage REIT that invests exclusively in agency RMBS tied to U.S. single-family home loans.

Operations: Orchid Island Capital generates about $270 million in REIT mortgage revenue, all from U.S. residential mortgage-backed securities.

Market Cap: US$1.19b

Orchid Island Capital provides direct exposure to mortgage-backed securities in a market where rates, spreads, and housing supply are all in flux. Earnings come from a pure agency RMBS portfolio, supported by recent profitability, a very high dividend yield, and ongoing buybacks. However, performance is still heavily shaped by how one unseen pressure affects funding costs and book value.

That unseen pressure is now squarely in focus with the 4 key rewards and 3 important warning signs (3 are major!), which allows you to see what might be masking the true risk or upside.

Rithm Capital (RITM)

Overview: Rithm Capital is a U.S. real estate and credit-focused asset manager built around mortgage origination, servicing, and housing finance exposure.

Operations: Rithm Capital generates about US$3.4b from Origination and Servicing, US$820 million from Asset Management, and US$320 million from its Investment Portfolio, almost entirely in the United States.

Market Cap: US$5.3b

Rithm Capital matters for this mortgage-focused screen because it sits at the intersection of origination, servicing, and investing in U.S. home loans, so the same rate moves that pressure many housing-linked stocks can reshape its fee streams and servicing economics.

"Continued strong U.S. housing demand and demographic tailwinds are driving expansion in Rithm's mortgage origination and servicing businesses, as shown by record growth and market share gains in both Newrez and Genesis, supporting higher origination volumes and fee revenue going forward."

What investors cannot ignore is how one unresolved funding and cash flow pressure could sharply alter how much of that growth reaches net earnings.

That funding question sits at the center of the full narrative for Rithm Capital, which examines how Rithm Capital’s fee engine, servicing cash flows, and credit risk could be decoupling from headline rate moves.

Ellington Financial (EFC)

Overview: Ellington Financial is a mortgage-focused REIT investing across agency and non-agency RMBS, reverse mortgages, and other credit assets tied to U.S. housing.

Operations: Ellington Financial currently generates about $287 million from Longbridge, $217 million from its Investment Portfolio, and a $49 million loss in Corporate/Other.

Market Cap: US$1.62b

Ellington Financial operates in mortgage assets and securitizations that respond directly to rate moves, credit trends, and funding spreads. Recent earnings strength, a high dividend yield, and Moody’s positive outlook all point to a business positioned for today’s elevated mortgage rates, depending on how one unseen pressure in its funding stack plays out.

That funding pressure makes it worth reading the 5 key rewards and 4 important warning signs (2 are major!) to see what could be quietly amplifying Ellington Financial’s dividend story.

Seeking Alternatives Before The Crowd?

Fresh ideas move fast. Breakout momentum, flying under the radar for now, often gets caught late once screens light up. Review these while it still matters and consider your options promptly.

• Target durable income streams by scanning the 7 dividend fortresses before yields drop or attention floods into the same high-payout opportunities.
• Look for compounding potential with the 30 high quality undervalued stocks before quality balance sheets and cash-rich operators stop trading at under-the-radar prices.
• Track where capital is moving with the 31 resilient stocks with low risk scores while these resilient businesses still trade as if nothing special is happening.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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