2 TSX stocks to buy amid housing market correction: CAR & TCN

The long-awaited correction in Canada's housing market has begun, but some market analysts are surprised by how rapidly it is unfolding.

According to the recent data released by the Canadian Real Estate Association, seasonally adjusted existing home sales declined 8.6% in May from the previous month and 21.7 percent from a year earlier.

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Home resales on a national level reportedly fell below levels recorded in February 2020 for the first time since the coronavirus pandemic began in 2020.

The S&P/TSX Capped Real Estate Index has declined 25.2 per cent year-to-date (YTD), and this means that the real estate stocks and real estate investment trusts (REITs) are trading at discounted prices, and long-term investors may see an opportunity to invest and hold.

If you are a long-term investor, here are two stocks you could consider for your portfolio:

Tricon Residential Inc. (TSX:TCN)

The real estate company has business operations in the United States and Canada. Tricon offers a variety of rental homes to its customers and manages at least 29,000 properties.

At market open on Monday, the TCN stock climbed 0.2 per cent, trading at C$ 12.34 per share at the time of writing. Notably, the company had achieved solid financial results in the first quarter of 2022 and updated its guidance for the full year.

In Q1 2022, the company's net income from continuing operations was US$ 163.5 million, up by 290 per cent year-over-year (YoY). Tricon now expects its same home growth revenue to record an increase of 7.5% to 9.5% in 2022 compared to the previous guidance of 7% to 9%.

For three months ended in March this year, Tricon's net assets grew to U$ 3.2 billion from US$ 3.1 billion at the end of fiscal 2021.

Canadian Apartment Properties Real Estate Investment Trust (TSX:CAR.UN)

It is one of the biggest REITs in the country and acquires and leases multiunit residential units in major Canadian cities.

On June 20, the CAR.UN stock recorded a surge of 1.3 per cent, probably an indicator of investors buying real estate stocks on the dip. At 10 AM EST, the CAPREIT stock was priced at C$ 43.82 apiece.

In Q1 2022, CAPREIT's net operating income was around C$ 153.2 million compared to approximately C$ 146.7 million in the previous year's first quarter. Meanwhile, the cash and cash equivalents jumped to C$ 63.79 million from C$ 51.5 million in the same period.

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Please note, the above content constitutes a very preliminary observation or view based on digital trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.