Real Estate

Real estate tech companies continue to get hammered by high mortgage rates

Welcome back to The Interchange, where we take a look at the hottest fintech news of the previous week. This week, we take a look at one startup layoff, another offering an employee ownership buyout option, and much more. If you want to receive The Interchange directly in your inbox every Sunday, head here to sign up!

From a $2B+ valuation to round after round of layoffs

Last week, I reported on Divvy Homes’ third round of layoffs in a year’s time. It was the latest casualty in a beaten down real estate tech sector.

I first wrote about rent-to-own startup Divvy Homes in September 2019 when it announced a $43 million Series B round to help in its mission to help more Americans “move from renters to [home]owners.” I then covered the company’s $110 million Series C in February of 2021.

Of course, at that time, it was

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Real Estate

Tech Stocks or Real Estate?

Image source: Getty Images

Written by Daniel Da Costa at The Motley Fool Canada

As interest rates have risen rapidly over the last year in an effort to cool inflation, stocks across many sectors have been impacted. But while many companies have seen some impact, there’s no doubt that some of the cheapest stocks, and consequently some of the best stocks to buy now, are tech and real estate stocks.

Rising interest rates hurt the valuation of tech stocks immensely. Not only have smaller, up-and-coming tech stocks seen their valuations plummet, but even high-quality companies like Shopify (TSX:SHOP) sold off by more than 80% from previous highs.

Meanwhile, many real estate stocks were hit as well. Rising interest rates naturally impact the value of real estate assets. So many REITs have seen their net asset values fall over the last year.

Furthermore, surging inflation raised the operating costs

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