The recent trends in construction spending underscore the potential opportunities in the real estate market. The U.S. Census Bureau's June 2023 reported construction spending has reached an estimated seasonally adjusted annual rate of $1,938.4 billion, representing a 0.5% increase from the revised May estimate of $1,929.6 billion. This growth is indicative of a steadily expanding construction sector, presenting an appealing landscape for real estate investment.

The year-on-year comparison highlights a remarkable 3.5% rise from the June 2022 estimate of $1,873.2 billion, underscoring the sector's resilience and consistent upward trajectory. This consistent growth shows the stability and potential for strong returns in real estate investments.

The first half of 2023 has seen a significant increase in construction spending, reaching $917.4 billion. This marks an impressive 3% growth compared to the same time frame in 2022. These figures indicate consistent demand for new developments and infrastructure, making real estate investment an appealing prospect for long-term wealth accumulation.

Per the report of the U.S. Census Bureau and the Department of Housing and Urban Development, June 2023 sales of housing units have surpassed 697,000 units year over year after adjustments for seasonal effects. This represents a slight decrease of 2.5% from the revised May rate of 715,000 units. However, it is important to note that this figure still reflects significant growth of 23.8% from the estimated number of 563,000 units in June 2022.

While initial concerns might arise due to the month-to-month decline from May to June, it is crucial to interpret these changes within the broader context of market trends. The remarkable year-on-year growth underscores the industry's resilience and adaptability in various economic conditions.

Nonetheless, investing in real estate mutual funds seems to be judicious as of now. Also, mutual funds, in general, diversify portfolios without several commission charges that are mainly associated with stock purchases and trim transaction costs (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

We have, thus, chosen three real estate mutual funds that investors should buy now for the long term. These funds possess a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000, and expense ratios considerably lower than the category average. So, these funds have provided comparatively strong performance along with lower fees.

T. Rowe Price Real Estate Fund (TRREX Quick QuoteTRREX - Free Report) seeks long-term growth through a combination of capital appreciation and current income. It generally invests most of its assets in equity securities of real estate companies and foreign securities.

Nina P. Jones has been the lead manager of TRREX since Dec 31, 2018. Most of the fund's holdings were in companies like American Tower Corporation (7.6%), Prologis, Inc. (7.5%), and Equinix, Inc. (6.6%) as of Mar 31, 2023.

TRREX's 3-year and 5-year annualized returns are 8.4% and 2.4%, respectively. Its net expense ratio is 0.82% compared with the category average of 1.08%. TRREX has a Zacks Mutual Fund Rank #1.

To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

Fidelity Real Estate Investment Portfolio (FRESX Quick QuoteFRESX - Free Report) fund aims for above-average income and long-term capital growth, consistent with reasonable investment risk. The majority of FRESX's assets are invested in securities of companies principally engaged in the real estate industry and other real estate-related investments.

Steven J. Buller has been the lead manager of FRESX since Dec 30, 1997. Most of the fund's holdings were in companies like Prologis, Inc. (11.2%), Crown Castle Inc. (8.8%) and Equinix, Inc. (7%) as of Apr 30, 2023.

FRESX's 3-year and 5-year annualized returns are 6.8% and 4%, respectively. Its net expense ratio is 0.72% compared with the category average of 1.08%. FRESX has a Zacks Mutual Fund Rank #1.

DWS RREEF Real Estate Securities Fund (RRRAX Quick QuoteRRRAX - Free Report) seeks long-term capital appreciation and current income. RRRAX invests the majority of its net assets in equity securities of real estate investment trusts and real estate companies.

John W. Vojticek has been the lead manager of RRRAX since Sep 30, 2004. Most of the fund's holdings were in companies like Prologis, Inc. (11.1%), American Tower Corp (9.4%) and Equinix, Inc. (8.5%) as of Mar 31, 2023.

RRRAX's 3-year and 5-year annualized returns are 6.7% and 4.6%, respectively. Its net expense ratio is 0.99% compared to the category average of 1.08%. RRRAX has a Zacks Mutual Fund Rank #1.

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