Opendoor: Macro Uncertainty Is More Important Than Rates

Summary:

  • Despite declining mortgage rates, Opendoor’s share price remains under pressure due to economic uncertainty and its dependence on home price stability.
  • The housing market’s current illiquidity and poor price discovery increase the risk of Opendoor struggling to move inventory.
  • Opendoor’s balance sheet is probably strong enough for the company to weather a downturn but access to outside capital may be needed if/when the company returns to growth.

House with American flag and "for sale" sign, low angle view

Phillip Spears/DigitalVision via Getty Images

Despite declining mortgage rates, Opendoor’s (NASDAQ:OPEN) share price remains under pressure due to the uncertain state of the economy. This is most likely because Opendoor’s business is far more dependent on home price stability than


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.


Leave a Reply

Your email address will not be published. Required fields are marked *