Shares of Opendoor Technologies (OPEN -8.29%) were falling today after strong economic data tamped down expectations that the Federal Reserve would cut interest rates soon.
Opendoor’s decline today was in line with rising Treasury yields and mortgage rates, following the Fed’s rate decision and commentary last week, and a strong employment report on Friday.
As of 3:04 p.m. ET, the stock was down 8.5%.
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Opendoor’s decline continues
Few stocks have as much sensitivity to interest rates as Opendoor, which makes money from buying and selling homes. As a house-flipper, falling mortgage rates favor the company since they tend to make home prices go up while rising interest rates have the opposite effect.
Today, the yield on the 10-year Treasury note rose 3.25% to finish at 4.16%, close to its highest level since mid-December, and the average rate for a 30-year fixed mortgage hit 7.04%, its highest level since December.
Mortgage rates are especially important for Opendoor right now as the spring peak home-buying season is set to begin next month, and elevated rates are likely to keep demand cool.
What’s next for Opendoor
Opendoor stock is likely to continue to move with interest rate expectations as it has for the past several months. The company is set to report fourth-quarter earnings next Thursday, and the results will give investors some insight into how the company’s recent cost cuts and general housing market activity have impacted the business.
Analysts are expecting the company’s revenue to fall 71.1% to $826.4 million in line with its pullback in home-buying, but see its adjusted loss per share narrowing from $0.63 to $0.18.
Expect the stock to swing on the news as Opendoor shares have long been volatile, and there is a wide range of outcomes in front of the company.
Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Opendoor Technologies. The Motley Fool has a disclosure policy.
