What happened
Leading iBuyer Opendoor (OPEN) was having an excellent day on Thursday. As of 3 p.m. EST, the real estate disruptor's stock had risen by 14% for the day and has now more than tripled from its 52-week low in just over a month.
So what
There isn't any company-specific news driving the news higher, but there has been a surge in optimism for the real estate market in general. Not only is Opendoor soaring, but Redfin (RDFN -6.55%) is up by 11% on the day, and fellow iBuyer Offerpad (OPAD 2.97%) rocketed higher yesterday after raising some much-needed capital.
In fact, Mortgage News Daily reported earlier Thursday that the average 30-year mortgage rate has fallen below 6% for the first time since September. And last week, Redfin reported pending home sales experienced their smallest year-over-year percentage drop in over three months, indicating that homebuyer demand is starting to come back. Seventeen percent more people are requesting home tours than at the November bottom, and the number of potential buyers contacting Redfin agents is up 13%.
Now what
We won't know how the improving real estate market will translate to actual sales volume for Opendoor until the company reports earnings later this month, but a strengthening real estate market will likely make it easier to unload the 16,873 homes it had in inventory at the end of the third quarter and the 2,259 homes it was under contract to purchase, and without taking too much of a loss. In a nutshell, it's looking more likely that Opendoor will be able to avoid a worst-case scenario in its business, and that's what investors seem to be cheering today.
