The latest batch of macroeconomic data has spurred a significant rally in real estate-focused names over the past few trading sessions. Shares of real estate brokerage services providers Redfin (NASDAQ:RDFN), Compass (NYSE:COMP), and Anywhere Real Estate (NYSE:HOUS) have surged by nearly 33%, 16%, and 29%, respectively over the past five sessions.
These price gains come after a challenging period for the industry, marked by elevated interest rates and tighter consumer budgets. However, the latest CPI print pointed to easing inflationary pressures. This, in turn, has raised hopes for a more accommodative stance from the Federal Reserve and potential rate cuts in the coming year.
If this anticipated scenario unfolds, homebuyers could once again return to drive up prices in the market. This wave of optimism has also driven shares of homebuilders such as D.R. Horton (NYSE:DHI) and KB Home (NYSE:KBH) higher by nearly 5.7% and 5.9%, respectively over the past five sessions.
Moreover, the Real Estate Select Sector SPDR ETF (NYSEARCA:XLRE) has gained nearly 6% over the past week. Still, the real estate sector may still have a few hurdles to jump over before full-fledged growth returns.
Which Real Estate Stock Is Best?
Finding the right stock in a particular sector can be a daunting task even for seasoned market veterans. Here, we used TipRanks’ Comparison Tool to see how the names on our real estate list stack up. Analysts seem to prefer Compass among the names on our list today, with a Moderate Buy consensus rating and an average price target of $3.45. This points to a substantial 40.2% potential upside in the stock.
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