The housing market seems to be stuck in second gear.
Mortgage rates eased out to 6.35% this week, though the lowest it has been in nearly a year, but affordability remains mostly tight.
Moreover, July existing-home sales ran at 4.01 million SAAR, with around 4.6 months’ supply and a $422,400 median price. August list price held around the $429,990 mark while homes sat 60 days on market, up seven days year-over-year.
That mix mostly points to cautious buyers, along with a thin supply, despite a small rate break.
Against that backdrop, one housing stock has gone near-vertical. Opendoor Technologies OPEN +269.00% ▲ has surged close to 269% in the past month.
Surprisingly, the incredible activity in the stock isn’t about a sudden macro tailwind. It’s about a company-specific pivot that has Wall Street back on the bandwagon.
What is Opendoor Technologies?
Opendoor is a tech-heavy homebuyer that makes efficient use of data and algorithms to make instant cash offers on homes. It also resells them with the aim to swap the long listing process for clarity and speed.
Think of it like trading in a car, which you can sell directly to Opendoor for cash and then pick your closing date, while the company handles repairs/resale on its side.
It’s important to note that Opendoor went public via a shell company when it merged with Social Capital Hedosophia II (IPOB). The deal closed mid-December 2020, with the combined company trading as OPEN on Dec. 21, 2020.
Opendoor stock reached an all-time high closing price of $35.88 on Feb. 11, 2021, which was a period fueled by record-low mortgage rates (2.65% in January 2021 to be precise), along with a red-hot housing market that strengthened its iBuying business model.
Challenges for Opendoor’s business and stock in past few years
- Mortgage rates jumped from 2021 lows, which effectively killed affordability and turnover.
- Existing-home sales tanked to multi-decade lows in 2024, crippling Opendoor’s deal flow.
- Large losses and inventory write-downs (its massive net loss of $1.4 billion in 2022, for instance) pressured capital and sentiment.
- iBuyer model credibility hit when one of its competitors (Zillow Offers) exited in 2021, on the back of price-forecasting issues.
Opendoor stock surges on founder-led reset
Opendoor has clearly been one of the hottest stocks of late. It’s up 269% in the past month, 650% over six months, and an eye-catching 467% year to date on the back of its “founder-led” reset.
That reset had everything to do with former Shopify’s COO Kaz Nejatian assuming the role of CEO, while cofounders Keith Rabois (as chair) and Eric Wu returned to the board.
Alongside the critical leadership changes, there was a $40 million equity injection from Khosla Ventures and Wu.
Nejatian laid out the vision clearly:
“It’s a privilege to become Opendoor’s leader… With AI, we have the tools to make [home buying/selling] radically simpler, faster, and more certain.” Also, incentives are designed to match ambition, with his base pay being $1, plus performance-tied equity grants.
The Fresh capital extends the runway as the founder-mode philosophy expands oversight while tightening governance, with early signals pointing to aggressive cost discipline.
Rabois called the company overstaffed, resulting in sharp opex cuts in the upcoming quarters. That will efficiently reset unit economics, support margins, and strengthen long-term viability.
