Would Lower Interest Rates Make Redfin Stock a Buy? Here's What You Need to Know.
Central bank policy affects all publicly listed U.S. businesses, more or less. Among the more directly affected companies is Redfin, (NASDAQ: RDFN) which operates a digital residential real estate marketplace.
The Federal Reserve sets the federal funds rate, which in turn affects America's mortgage interests rates. After roughly two years of elevated rates, the tide may finally turn in Redfin's favor if the Fed finally starts to reduce interest rates, thereby incentivizing the borrowing and homebuying activity that allows Redfin to make money.
Redfin Senior Economist Sheharyar Bokhari connected those dots in a recent report, observing first-time homebuyers coming "off the sidelines, buoyed by falling mortgage rates and an increased number of homes hitting the market." It may be too early to breathe a sigh of relief, however, as Redfin and its shareholders shouldn't over-rely on "lower for longer" interest rate policy that hasn't actually started yet.
Source Fool.com
