Shares of Zillow are up nearly 40 percent this year, trading in the company's stock is at a record high, and the company reported robust profit growth in February 2018.
While Zillow's sails are full, their senior economist Aaron Terrazas recently warned that if the average rate for a 30-year fixed mortgage rises to 5 percent by the end of this year, "it would make homes less affordable in 17 of the nation's top 35 housing markets," and that homebuyers should anticipate the continued rise of mortgage rates, CNN Money reports. The average rate currently stands at approximately 4.6 percent nationally, per Bankrate.
Still, it's curious that Zillow is doing so well at a time when more alarm bells are ringing in the housing market. Shares of many other housing-related companies have pulled back. The somewhat misnamed SPDR S&P Homebuilders ETF is down 5 percent this year. This fund owns the stocks of builders such as Lennar and Toll Brothers, but also retailers such as Home Depot and Lowe's, appliance maker Whirlpool and the bedding company Tempur Sealy.
Advertisement
Related Stories
Market Data + Trends
Vacation and Investment Home Market Insights
A recent report finds beach homes to be the most sought-after vacation-home type and that the investment potential of a second home is an important factor in the purchasing decision
Affordability
How Much Income Do First-Time Buyers Need to Afford the Average Home?
The median-priced home is unaffordable in 44 of the 50 largest U.S. metro areas
Affordability
What Is the Relationship Between Urban vs. Suburban Development and Affordability?
A new paper from Harvard's Joint Center looks at whether expanding the supply of suburban housing could, in turn, help make dense urban areas more affordable