Zillow, Redfin and Other Real-Estate Stocks Rally as Soft May CPI Boosts Hopes for Lower Mortgage Rates

Jerry Kronenberg joined discussion · Jun 12 10:37

$Zillow-A (ZG.US)$, $Redfin (RDFN.US)$ and other real-estate stocks rose Wednesday, apparently gaining ground on hopes for lower mortgage rates following a weaker-than-expected that May Consumer Price Index.

Home-buying platform Zillow led the sector higher, adding 12.2% to trade at $46.85 shortly before 11:30 a.m. ET.

Other large percentage gainers as of that hour included:

-- Real-estate brokerage $Redfin (RDFN.US)$, which gained 11.9% to $6.98

-- Rival brokerage $Compass (COMP.US)$, up 9.5% at $3.985

-- Mortgage firm $LendingTree (TREE.US)$, +9% at $46.19

-- Real-estate agency $RE/MAX Holdings (RMAX.US)$, which added 8.6% to $8.86

-- Home-sales platform $Opendoor Technologies (OPEN.US)$, ahead 7.5% at $2.29

-- Mortgage lender $loanDepot (LDI.US)$, trading 6.2% higher at $2.05

The stocks rose after the May "core" Consumer Price Index – which measures retail inflation while excluding volatile food and energy prices – came in at 3.4% instead of the 3.5% economists had forecast.

Lower U.S. inflation should send U.S. mortgage rates down from the 7%+ they've seen over the past year – a level not previously recorded since 2001.

Softer mortgage rates historically boost home sales, which should benefit real-estate stocks.

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Jerry Kronenberg

Director of Financial Content

Former top editor at Seeking Alpha, Fidelity.com, TheStreet.com and UPI.

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