Wedbush analysts today upgraded Zillow Group (ZG, Z) shares to Outperform from Neutral, citing favorable trends in the housing market, particularly the recent drop in mortgage rates. In a note, Wedbush analyst Jay McCanless called lower mortgage rates a "potentially positive catalyst" for the stock in the months ahead. McCanless also highlighted the strength of the company's software and services initiatives, which he believes that could further enhance existing estimates.

Mortgage rates fell last week to their lowest level since February 2023, according to Freddie Mac. With the Federal Reserve set to cut interest rates later this week, experts expect mortgage rates to decline in 2024 and into 2025. This expectation had boosted shares of other real estate names, including Redfin (RDFN) and RE/MAX Holdings (RMAX). Zillow shares climbed in today's trade on the back of the upgrade, after surging 12% last week.

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This post was written by Kathleen Welch