The firm expects that cooling home prices could boost the stock in 2024.
Zillow Group could be on the verge of a strong year, according to Bank of America. Analyst Curtis Nagle double-upgraded shares to buy from underperform, and roughly doubled his price target, noting: "While real estate fundamentals remain very challenged given the macroeconomic environment and rates pressure, we believe the market may trough in early 2023 and are more confident that growth can return to double-digits in 2024 on improving affordability.
Still, he noted that that declines in mortgage purchase applications have eased since October, which could signal an improvement in home volume trends starting in the second quarter of 2023. "We forecast that home transactions will accelerate to 10% in 2024 on lower home prices and mortgage rates as well as some mean reversion as volumes are 24% below the historical average," Nagle wrote.
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