Redfin and ReMax Pop 20%+ Intraday as U.S. Mortgage Rates Ease

Jerry Kronenberg wrote a column · Sep 14, 2024 02:40

$Redfin (RDFN.US)$ and $RE/MAX Holdings (RMAX.US)$ soared more than 20% intraday Friday despite no apparent news for either real-estate firm other than a recent downtrend in mortgage rates ahead of next week's Federal Reserve interest-policy meeting.

RDFN gained as much as to a 24% to a $14.27 session high – its best level since August – while RMAX added as much as 23.9% to a $13.64 intraday peak.

Neither company announced any news Friday, but both have been gaining ground in recent days amid easing mortgage rates – which would presumably increase home sales and benefit the two brokerage firms' businesses.

Freddie Mac reported Thursday that the average U.S. 30-year fixed mortgage rate fell 0.15 percentage points over the past week and more than 0.5 points over six weeks to 6.2%, the lowest level since February 2023.

Next week's Federal Open Market Committee could also see the central bank cut short-term interest rates for the first time in years.

While FOMC moves don't usually directly impact mortgage rates, a Fed belief that U.S. inflation is easing could send long-term rates like those covering mortgages – which historically key off of the $U.S. 10-Year Treasury Notes Yield (US10Y.BD)$ -- easing as well.

Meanwhile, The Wall Street Journal reported Friday that former President Donald Trump's allies have been putting together plans to privatize government-sponsored mortgage purchasers Freddie Mac and Fannie Mae if the Republican retakes the White House. However, it's unclear how that would benefit real-estate brokerage firms like Redfin and ReMax.

Still, other real-estate-related stocks rose Friday as well, although not as significantly as RDFN and RMAX did. As of shortly before 2:30 p.m. ET, gainers included:

-- $FREDDIE MAC (FMCC.US)$, better by 6.5%

-- $FEDERAL NATIONAL MORTGAGE ASSOC (FNMA.US)$, up 6.3%

-- $Compass (COMP.US)$, ahead 6.1%

-- $Zillow-C (Z.US)$, which added 5.2%

-- $Opendoor Technologies (OPEN.US)$, which rose 3%

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