Investors were very open to Opendoor Technologies (OPEN 1.99%) on Tuesday. The next-generation real estate company’s share price enjoyed a 2% bump on the day, while the S&P 500 index slumped by nearly 0.5%. Some highly encouraging statistics from the U.S. housing market were behind the stock’s lift.
Government data released Tuesday morning revealed that housing starts in this country rose to 1.63 million at an annual rate in May. That was a very juicy 22% leap over the May figure and well above the numbers estimated by most economists tracking the metric.
Annualized housing starts are a measure of how many dwellings would be built in the coming year if the monthly level of new constructions were projected over a 12-month period. They are a key indicator of the health of the U.S. housing market.
Which is why investors greeted the news as a positive for real estate companies like Opendoor. More houses being constructed, of course, typically means more homes for sale before long. The Opendoors of this world depend on volume, so a better-than-expected widening of the market has clear and obvious potential to benefit the company (and its peers) down the road.
Opendoor did not provide any estimates for how the surprisingly high housing-starts number might affect its business. In fact, it didn’t issue an official statement on it at all. But then again, it didn’t need to — it’s unambiguously a bullish development for the company. Now it remains to be seen whether this feat will be repeated, and if so, whether Opendoor can capitalize on the upward trend.