Mortgage rates are currently at the lowest levels of 2025. The average 30-year mortgage rate was 6.58% as of Aug. 21, 2025, unchanged from the previous week and down from 6.91% at the start of 2025, per Freddie Mac data.

Mortgage Rates Since January 2025

Image Source: FREDDIE MAC

The decline is notable as rates had been hovering near 7% throughout much of late 2024 and early 2025. The decrease reflects market optimism for possible rate cuts by the Federal Reserve later in the year, as well as shifting inflation and bond market dynamics.

Hence, mREITs like Apollo Commercial Real Estate Finance (ARI Quick QuoteARI - Free Report) , Annaly Capital Management (NLY Quick QuoteNLY - Free Report) , and Orchid Island Capital (ORC Quick QuoteORC - Free Report) are worth keeping an eye on.

Housing affordability challenges are expected to decline with lower mortgage rates. With rates trending lower and balanced supply/affordability playing out in the mortgage market, loan demand is increasing. With this, mortgage originations and refinancing are seeing a positive trend. 

According to data from the Mortgage Bankers Association for the week ending Aug. 15, 2025, purchase applications were relatively stagnant but at the strongest pace in four weeks and continued to run well ahead of last year’s pace, The Refinance Index decreased 3% from the previous week and was 23% higher than the same week one year ago. 

With improving purchase originations and refinancing activities, mREITs will likely witness book value improvement as spreads in the Agency market tighten, driving asset prices. This should also boost net interest spread, aiding mREITs' financials in the upcoming period.

3 mREIT Stocks to Keep an Eye On

Apollo Commercial focuses on originating, acquiring, investing in, and managing performing commercial mortgage loans, subordinate financings, and other commercial real estate-related debt investments.

The company’s $8.6-billion portfolio of loans is secured by properties located in the United States and European gateway cities. Moreover, 96% of lending books consist of floating-rate loans. This offers a key tailwind for the company during a high-interest-rate environment.

Though the company’s NII declined 23.9% year over year in the first half of 2025, the metric is expected to rise in the upcoming period, given the decline in mortgage rates.

ARI also pays out regular dividends, with a dividend yield of 9.9% and a payout ratio of 96%.

Apollo Commercial Real Estate Finance Dividend Yield (TTM)

The Zacks Consensus Estimate of ARI’s 2025 and 2026 earnings indicates year-over-year rallies of 141.9% and 6.3%, respectively. This Zacks Rank #2 (Buy) company has a market cap of $1.43 billion. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Annaly’s strength lies in its diversified investment strategy, spanning residential credit, mortgage servicing rights (MSRs), and Agency mortgage-backed securities (MBS). This approach helps reduce volatility and interest rate sensitivity while targeting attractive risk-adjusted returns.

As of June 30, 2025, NLY managed an $89.5-billion portfolio, with $79.5 billion in liquid Agency assets. The company is also expanding its MSR business, which serves as a hedge against rising rates by gaining value when prepayments slow. By balancing Agency MBS with MSRs, it enhances yield, mitigates risk, and positions itself for more stable long-term performance across rate cycles.

Given relatively lower mortgage rates, in the first half of 2025, the company’s NII increased to $493.2 million from $47.1 million in the same period a year ago. With improving purchase originations and refinancing, Annaly is positioned for book value gains as tighter Agency spreads lift asset prices. A wider net interest spread should also enhance portfolio yields, supporting stronger financial performance ahead.

It has a record of paying out monthly dividends, currently yielding a staggering 13.6%. It currently sits at a payout ratio of 99%.

Annaly Capital Management Inc Dividend Yield (TTM)

The Zacks Consensus Estimate of NLY’s 2025 and 2026 earnings indicates year-over-year increases of 7% and 2.5%, respectively. This Zacks Rank #3 (Hold) company has a market cap of $13.4 billion.

Orchid has maintained its focus on Agency residential mortgage-backed securities (RMBS), an investment strategy that has positioned it as one of the strong players in this specialized market segment. 

ORC’s investment strategy focuses on two categories of Agency RMBS: traditional pass-through Agency RMBS, such as mortgage pass-through certificates and collateralized mortgage obligations issued by Fannie Mae, Freddie Mac, or Ginnie Mae, and structured Agency RMBS.

Moreover, Agency RMBS will continue to offer a compelling return opportunity for the company. Although the market is extremely competitive, the company's focus on Agency RMBS puts it in a position to possibly profit from favorable trends. However, execution will be crucial to achieving these advantages.

In the first half of 2025, Orchid’s NII rose to $42.9 million compared with net interest expenses of $3.2 million in the year-ago period. Given a favorable mortgage rate environment, the company’s NII is likely to improve further in the upcoming period.

The company pays out regular dividends, currently yielding a whopping 20.4%. It has increased its dividend two times over the past five years.

Orchid Island Capital, Inc. Dividend Yield (TTM)

The Zacks Consensus Estimate of ORC’s 2025 and 2026 earnings indicates year-over-year rallies of 450% and 39.7%, respectively. This Zacks Rank #3 company has a market cap of $899.8 million.