As the Housing Market Tightens, Zillow Is Soaring

Shares of Zillow are up nearly 40 percent this year, trading in the company's stock is at a record high, and the company reported robust profit growth in February 2018.

While Zillow's sails are full, their senior economist Aaron Terrazas recently warned that if the average rate for a 30-year fixed mortgage rises to 5 percent by the end of this year, "it would make homes less affordable in 17 of the nation's top 35 housing markets," and that homebuyers should anticipate the continued rise of mortgage rates, CNN Money reports. The average rate currently stands at approximately 4.6 percent nationally, per Bankrate.

Still, it's curious that Zillow is doing so well at a time when more alarm bells are ringing in the housing market. Shares of many other housing-related companies have pulled back. The somewhat misnamed SPDR S&P Homebuilders ETF is down 5 percent this year. This fund owns the stocks of builders such as Lennar and Toll Brothers, but also retailers such as Home Depot and Lowe's, appliance maker Whirlpool and the bedding company Tempur Sealy.

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