This Unstoppable Stock Is Up 41% in July, but It's Not Too Late to Buy
The real estate industry has certainly suffered as a result of the U.S. Federal Reserve's aggressive hike in interest rates to tamp down outsized inflation. The central bank increased the federal funds rate from a historic low of 0%-0.25% up to 5.25%-5.5% in just 18 months between March 2022 and August 2023.
It crimped consumers' borrowing power, and it also forced existing homeowners to rethink their plans to sell, because they would have to give up their low fixed-rate mortgage to take on a much higher rate when buying a new property. Those factors slowed the housing market to a crawl. The most recent U.S. existing home sales data (May 2024) reported 4.1 million annualized units, which is down 37% from the 2021 peak of 6.6 million.
Real estate technology company Redfin (NASDAQ: RDFN) operates one of the largest real estate brokerages in the country, and it has been under serious pressure since 2021. Fortunately, recent favorable inflation and employment data triggered a shift in sentiment. Analysts surveyed by the CME Group's FedWatch service now forecast as many as three interest rate cuts from the Fed before the end of 2024, sending Redfin stock surging 41% this month alone. Here's why it's not too late to buy.
Source Fool.com
