Housing stocks are the AI sell-off's winners as bond yields sink

Housing stocks have turned out to be a surprise winner in the tech stock sell-off. Despite ongoing pressure in the tech sector, listings giant Zillow ( Z ) gained 11% on Thursday. Homebuying and selling platform Opendoor ( OPEN ) surged 17%, online brokerage Compass ( COMP ) jumped nearly 10%, and commercial real estate database CoStar ( CSGP ) rose more than 6%. The reason for their success has to do with the close relationship between mortgage rates and bond yields. Lately, investors have been shunning US government debt, sending yields and mortgage rates sharply higher. But on Thursday, the sell-off in chip stocks sent investors fleeing back to their classic safe-haven investment, Treasurys . Because bond prices and yields move inversely, yields on long-dated government debt dropped sharply. The drop in yields is a sign that home financing costs could get a breather after a bruising few weeks that sent mortgage rates to around 7.5%. The 10-year Treasury yield, which mortgage rates closely track, was down 10 basis points Thursday afternoon. That translated to a 12-basis-point drop in average 30-year fixed-rate mortgage rates to 7.33%, according to Mortgage News Daily. Last week, rates averaged 7.4% , according to Freddie Mac data, near a three-year high. Despite Thursday's enthusiasm, it's been a bruising time to invest in housing-linked stocks. The housing market has been nearly frozen for more than three years, hurting the companies' bottom lines and battering their share prices. Shares of Zillow are down 67% over the last five years, while Opendoor has lost 90% of its value in the same time period.

Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.