Opendoor and Zillow Surge 7% as Long-Term Rates Retreat; Compass Climbs 6%

Quick Read

• Opendoor surges 9% while Zillow and Compass each gain 8% as the 10-year Treasury yield retreats to 5.1%, cutting mortgage costs.

• Homebuilder ETF ITB climbed only 4% and SPY barely moved 0.1%, showing rate relief concentrated almost entirely in housing transaction stocks.

• Opendoor’s homes sitting over 120 days dropped from 36% to 9%, and home purchases surged 149% year over year despite a 43.6% revenue decline.

Falling long-term interest rates are lifting housing-linked stocks, and shares of the company that carries homes on its own balance sheet are moving the most. Opendoor Technologies (NASDAQ:OPEN) shares are up 7% to $2.14 in morning trading.

Meanwhile, Zillow Group (NASDAQ:ZG) shares are up 7% to $31.40. Compass (NYSE:COMP) shares are up 6% to $9.32, nearly keeping pace with Zillow shares.

Bond markets are behind the move, with the yield on the 10-year Treasury note lower at 5.1% after rising the day before. Housing-linked names benefit most, since cheaper long-term borrowing pulls mortgage rates down and improves affordability.

Rate Relief Hits Opendoor Hardest

Opendoor buys homes onto its own balance sheet, repairs them and resells them, so a move in long-term rates hits its financing cost and the pace at which it sells inventory at the same time. That pace is improving, with homes on the market for more than 120 days falling to 9% from 36% a year earlier. Zillow and Compass earn transaction fees without carrying homes.

Management at Opendoor has highlighted “Interest rate sensitivity impacting residential real estate demand” as a key risk and described “one of the most challenging housing markets in decades.” Lower long-term rates ease that pressure directly.

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Homebuilder stocks are climbing generally, with the iShares U.S. Home Construction ETF (CBOE:ITB) up 4% to $86.67. The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is up 0.1% to $770.64, showing how concentrated the rate move is in housing stocks.

Opendoor’s Operations Improve Beneath the Loss

Opendoor’s latest quarterly report, for Q2 FY2026, showed revenue of $883 million. That figure was down 43.6% year over year (YoY), missing expectations.

Much of Opendoor’s per-share miss traced to equity pay. The company lost $0.17 per share against an expected $0.02 loss, with $119 million in stock-based compensation, including $100 million in market-condition awards.

Beneath that noise, Opendoor’s core operations improved. Its contribution margin expanded to 5.8% from 4.4% a year earlier.

Buying activity at Opendoor also accelerated, with home purchases up 149% YoY to 4,378. Those purchases came alongside 6,908 acquisition contracts signed on just $5 million of marketing spend.

Putting Opendoor’s Rally in Perspective

Opendoor shares started the year at $5.83, so the gain is a reversal inside a long decline. Rallies inside a slide this deep could fade quickly if yields turn back up.

Guidance from the August 4 report calls for Opendoor’s Q3 2026 revenue to grow at least 20% YoY. Chief Executive Kaz Nejatian also repeated a path to positive Adjusted Net Income on a 12-month go-forward basis by year-end.

Management expects Opendoor’s Q3 contribution margin to land between 4% and 4.5%. That step down is smaller than Opendoor’s historical seasonal decline from Q2 to Q3.

Long-Term Rates Set Opendoor’s Next Move

Housing transactions still have room to recover. Existing-home sales ran at a 3.99 million annualized pace in September, up 1.5% from August. For Opendoor, the question now is whether long-term rates keep falling long enough to lift transaction volumes.

Improving margins and faster inventory turns give the Opendoor bull case substance, while the steep revenue decline and heavy equity pay give the skeptics plenty to worry about. Opendoor’s Q3 report will show whether its revenue growth target holds, and investors should keep any position sizes small until then.

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