Happy 2026 to all my Opendoor investors!
The stellar team continues to execute at a pace that feels like something out of a VC’s wet dream. But for this article, I wanted to touch on the potential impact of 2026 housing macro trends on the business as I feel that is especially salient right now with all the housing chatter.
As we head into the mid-terms, housing and housing affordability has become one of the top issues for the administration. This has meant exploring different avenues like portable mortgages, increased MBS purchases by Fannie and Freddie, and putting pressure on the Fed to lean “dovish.”
Opendoor rode the housing wave in 2020 all the way up to $35 and I wanted to walk through some quick math in this article to show just why rate trends are so powerful for the business.
Jet Fuel
In a very simplified world, let’s imagine Opendoor buys a home for $400K and lists it for $420K - hoping to target a 5% gross margin at underwriting. Now imagine there are two buyers in this world, who are both approved for a max of $420K at a 6% rate. This would make their monthly payment around $2350.
They bid against each other and both can offer up to $420K max on the $420K home. Opendoor walks away with its target 5% GM - no sweat.
NOW imagine rates drop to 5.75% between when Opendoor offered on the home and listed it. All of a sudden, with the same $2350 per month payment, the two buyers can afford up to $430K (rough math).
Because we’re in a world where this is the only home on the market, both buyers bid up to their max and Opendoor walks away with a $430K offer or 7.5% GM sale - Fully 250bps higher than what it originally underwrote the home to.
Mortgage rates fell only 25bps but Opendoor would see 10x that in incremental margin gain
6.00% Rate
5.75% Rate
In a business where we’re talking low single digit target margins, you can see the power of how mortgage rate shifts can rapidly transform the unit economics of iBuying by increasing buyer spending power.
This was exactly the dynamic that caused Opendoor’s rise to $35 in 2021 and then fall 97% to $1 by 2023.
High Orbit
The real crux is that this margin “windfall” only happens on the change of rates, in other words, only as rates fall, not if rates stay stable but low. That’s essentially a one time positive “shock” to Opendoor’s margins.
On the other hand, lower rates also translate to more housing activity and lower days on market (DOM); which is more sustainable as long as rates remain stable. How much of a rebound is anyone’s guess but I think there is a strong case to be made that pent-up buyer demand is real and there's a meaningful chance we could see a “mini-Covid like” housing ramp-up this year if rates hit high mid to low 5's.
I estimate 10 days lower DOM is probably a reasonable base case if rates stay below 6% while 20 days would potentially be the high end (true pent-up demand housing bull case).
This would translate to roughly 40-80bps of structural higher margins purely due to lower holding costs.
Rates Haven’t Dipped Below 6% in Almost 3.5 Years!
Even at 6%+ Rates - 2023 saw 10 lower DOM than 2025
The Fat Pitch
- Best-in-class execution from AI-native rock-star team
- The absolute biggest market with near infinite opportunities to improve consumer experience
- “Jet-fuel” margin bump
- Structural margin tailwinds as rates fall
The above 4 reasons are why I continue to believe $OPEN is one of the “fattest pitches” on the market and also why I’ve been such an advocate for the company to investors on X.
Fairy-tale stories like this truly don’t happen that often (Carrie deposed, Kaz and Keith revival) and I think 2026 will be the year where things all come to a head.
Of course, I have a lot more questions than answers right now on (cash plus? nationwide launch? mortgages? ancillary services? high-margin lead gen revenue?) but I'm sure in time all things will be revealed.
When they are, I'm confident the stock will break $10 again and march towards new ATH's.