Redfin Corp - RDFN STOCK NEWS

Redfin reports that 48% of U.S. home listings in August had been on the market for at least 60 days, up from 43.2% a year ago. This marks the highest share for any August since 2019 and the fifth consecutive month of annual increases in long-standing listings. Nearly 70% of homes have been on the market for at least 30 days, up from 63.9% last year.

The typical U.S. home was listed for 37 days before going under contract in August, six days longer than a year earlier. However, market speeds vary significantly across the country. Seattle homes sold fastest at 12 days, while West Palm Beach, FL had the slowest sales at 79 days. Florida metros generally experienced slower sales due to increased housing supply and leveling off of inbound migration.

Redfin reports that U.S. homebuyers now need an annual income of $115,454 to afford the median-priced home ($433,101), marking a 1.4% decrease year-over-year. This is the first annual decline since June 2020, primarily due to mortgage rates posting their first annual drop in three years. The average 30-year mortgage rate fell to 6.5% in August from 7.07% a year earlier.

Despite this improvement, the typical U.S. household, earning an estimated $83,853 per year, still falls 27.4% short of the required income to afford the median-priced home. Less than one-third of home listings are affordable for the typical household, down from over half pre-pandemic. Home prices have risen 3% year-over-year and are just 2.1% below their all-time high, mainly due to a shortage of homes for sale.

Redfin reports that rental affordability in swing states has improved since the last presidential election. The typical renter household in swing states now earns 17.1% less than needed to afford the median-priced apartment, compared to 20.6% less during the last election cycle. This improvement is attributed to rising incomes and sluggish rent growth.

Key findings include:

• Median renter household income in swing states: $50,267 (up 29.3% since last election)
• Median asking rent in swing states: $1,516 (up 23.8% since last election)
• Arizona showed the most significant improvement in affordability
• Michigan was the only swing state where affordability worsened
• Pennsylvania renters face the worst affordability challenges

Despite improvements, many renters still struggle with housing costs, with the typical swing state renter considered "rent burdened."

Redfin reports that U.S. housing payments have declined 2.7% year-over-year, marking the largest drop since May 2020. The median monthly payment is now $2,534, nearly $300 below April's peak. This improvement in affordability comes as mortgage rates hit a 20-month low ahead of the Fed's first interest rate cut since 2020.

Despite lower payments and a 5.1% increase in new listings, pending home sales are down 6.9% year-over-year. Buyers seem to be waiting for further rate drops, clarity on new NAR rules, and the outcome of the upcoming election. The market now has about four months of supply, up from three months last year, indicating a shift towards a more buyer-friendly market.

Redfin reports that existing home sales fell 1% month-over-month and 3.1% year-over-year in August 2024 to a seasonally adjusted annual rate of 4,042,369, the lowest level since May 2020. Pending sales dropped to a record low, declining 1.9% month-over-month and 2.4% year-over-year. Despite mortgage rates falling to 6.5% in August, the lowest in over a year, buyers remain hesitant due to elevated home prices. The median sale price rose 3% year-over-year to $433,101.

Positive signs for buyers include a 1.6% month-over-month increase in new listings and fewer homes selling above asking price. Only 30.2% of homes sold above list price in August, down from 36.2% a year earlier. The Federal Reserve is expected to cut interest rates, potentially leading to further mortgage rate declines.

Redfin's report reveals U.S. home prices increased 0.5% in August 2024, the largest monthly rise since April. Year-over-year, prices grew 6.7%, the lowest annual increase since January. Despite a 16.7% increase in housing supply from last year, it remains 30% below pre-pandemic levels, contributing to price growth.

Of the 50 most populous U.S. metros, 20 saw price drops, with San Antonio experiencing the largest decline (-2.4%). Conversely, Philadelphia led gains (1.5%). Redfin Senior Economist Sheharyar Bokhari suggests that if mortgage rates fall further this fall, as expected, price growth may accelerate as more buyers enter the market.

Redfin reports a significant decline in mortgage-rate locks for second homes, dropping 13.1% year-over-year in August 2024 to an eight-year low. This decrease is more than double the 5.2% decline observed for primary homes. Second-home mortgage demand has plummeted 59.2% from pre-pandemic levels, compared to a 31.9% drop for primary homes.

Factors contributing to this trend include:

• High home prices and elevated interest rates
• Increased likelihood of cash purchases by second-home buyers
• Higher costs for second homes and government-imposed loan fee increases
• Return-to-office mandates reducing time spent in vacation homes
• Stagnating rental markets and restrictions on short-term rentals
• Economic uncertainty and recession concerns

This slowdown contrasts sharply with the surge in second-home demand during the pandemic, which peaked at 96.2% above pre-pandemic levels in October 2020.

Redfin reports that falling mortgage rates have made housing payments more affordable than a year ago, despite higher home prices. The median U.S. monthly housing payment was $2,558 during the four weeks ending September 8, down 1.3% year-over-year. This is due to mortgage rates dropping to their lowest level in over a year. However, home prices remain elevated at a median of $388,085, up 3.7% annually.

Pending home sales are down 7.8% year-over-year, the biggest decline in nearly a year. Factors contributing to this include high home prices, confusion about new NAR rules, and buyers waiting for further rate decreases. Despite this, early-stage demand indicators are showing signs of improvement, with Redfin's Homebuyer Demand Index near its highest level since May.

Redfin reports that median U.S. asking rent rose 0.9% year over year in August to $1,645, marking the biggest annual increase since April 2023. Despite this rise, rents remain 3.2% below the all-time high set two years ago. The report highlights:

- 0-1 bedroom apartments: up 0.1% to $1,495
- 2 bedroom apartments: unchanged at $1,725
- 3+ bedroom apartments: down 1.7% to $2,008

Rental affordability has improved due to lower rents and wage growth of 3.8% year over year. The construction boom, especially in Sun Belt states, has led to supply outweighing demand in some areas. Austin, TX saw the steepest rent decline at 17.6% year over year, while Virginia Beach, VA experienced the largest increase at 15.2%.