Opendoor, Zillow, Compass Surge as 10-Year Treasury Yield Falls to 5.1%

Opendoor Technologies shares jumped 7% to $2.14 in morning trading as the yield on the 10-year Treasury note dropped to 5.1%, a move that lifted other housing-linked stocks. Zillow Group shares rose 7% to $31.40, while Compass shares climbed 6% to $9.32, tracking the broader rally in the sector.

The shift in bond markets is driving the equity gains, as lower long-term borrowing costs typically reduce mortgage rates and improve housing affordability. This dynamic particularly benefits Opendoor, which purchases homes onto its own balance sheet, repairs them, and resells them. Consequently, movements in long-term rates simultaneously affect Opendoor's financing costs and the velocity of its inventory sales. In contrast, Zillow and Compass generate revenue through transaction fees without holding homes on their balance sheets.

Opendoor's operational metrics suggest some relief from the pressure of higher rates. The percentage of homes on the market for more than 120 days fell to 9%, a sharp decline from 36% a year earlier. The company's latest quarterly report for Q2 FY2026 revealed revenue of $883 million, down 43.6% year over year. This figure missed market expectations, largely due to $119 million in stock-based compensation, which included $100 million in market-condition awards. As a result, Opendoor reported a loss of $0.17 per share against an expected loss of $0.02.

Despite the revenue miss, core operations showed improvement. Opendoor's contribution margin expanded to 5.8% from 4.4% in the same period last year. Buying activity also accelerated, with home purchases rising 149% year over year to 4,378 units. These purchases accompanied 6,908 signed acquisition contracts, achieved with just $5 million in marketing spend.

The current rally represents a reversal for Opendoor shares, which began the year at $5.83. Management has outlined a path toward positive Adjusted Net Income on a 12-month go-forward basis by year-end. Guidance from the August 4 report projects Q3 2026 revenue to grow at least 20% year over year. However, the company expects its Q3 contribution margin to settle between 4% and 4.5%, a seasonal decline smaller than its historical Q2-to-Q3 pattern.

Broader market indicators reflect this housing-specific momentum. The iShares U.S. Home Construction ETF rose 4% to $86.67, while the SPDR S&P 500 ETF Trust gained only 0.1% to $770.64. Existing-home sales ran at an annualized pace of 3.99 million units in September, up 1.5% from August.

Investors remain divided on Opendoor's trajectory. While improving margins and faster inventory turns support the bullish case, the steep revenue decline and heavy equity compensation continue to weigh on sentiment. The upcoming Q3 report will test whether the company can meet its revenue growth targets amid fluctuating interest rates.