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Investor sentiment is improving for housing-related stocks due to recent interest rate cuts by the Federal Reserve, with mortgage rates falling to 6.34%, near one-year lows. Wall Street anticipates this will enhance affordability in the housing market, alleviating pressure on homebuilders reliant on price cuts and mortgage rate buydowns.
Toll Brothers (TOL) has led the surge, with shares rising over 20% in the last three months, capitalizing on its affluent customer base. Meanwhile, Rocket Companies (RKT) has increased its visibility in the mortgage sector with a $14.2 billion acquisition of Mr. Cooper Group and a 60% rise in stock value in 2025, despite recent retraction from a 52-week high.
Analysts have also begun to upgrade Zillow Group’s (ZG) stock, with price targets raised to over $90 per share, although it currently holds a Zacks Rank 4 (Sell) as it trades around $74, up 5% YTD.
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