Redfin Corporation - RDFN STOCK NEWS

A new Redfin survey reveals that 48.4% of U.S. renters believe Kamala Harris would be best for making housing more affordable, while 31.2% favor Donald Trump. The remaining 18.7% are unsure. The survey, conducted by Ipsos in September 2024, polled 1,802 people aged 18-65, focusing on 894 renter respondents.

Redfin Chief Economist Daryl Fairweather explains that renters tend to lean Democratic due to their demographics: younger people living in cities with higher living costs. Regarding voting intentions, 43.6% of surveyed renters plan to vote for Harris, 28% for Trump, while 12.3% don't plan to vote and 11.7% are undecided.

Fairweather emphasizes that solving the housing affordability crisis requires a coordinated effort between federal and local governments over many years, focusing on incentivizing homebuilding to address the housing shortage.

Redfin reports that 54% of newly constructed apartments completed in Q1 2024 were rented within three months, up from 47% in the previous quarter but down from 58% a year earlier. This uptick may indicate building owners are attracting renters with more affordable rents and concessions. The slower absorption rate compared to previous years is attributed to increased apartment construction, especially in Sun Belt metros. Studio apartments filled up faster at 58%, while one-bedroom and two-bedroom units saw a 53% absorption rate. The national rental vacancy rate for buildings with five or more units increased to 7.8% in Q2, up from 7.4% a year earlier, suggesting supply slightly outpaces demand.

Redfin reports that buying a starter home is now cheaper than it was a year ago. U.S. homebuyers need to earn $76,995 annually to afford the median-priced starter home ($250,000), down 0.4% year over year. This is the first annual decline since August 2020, primarily due to lower mortgage rates offsetting the 4.2% increase in starter-home prices.

However, starter homes are still much less affordable than before the pandemic. The typical household earns $83,853 per year, 8.9% more than needed for a median-priced starter home. This is an improvement from last August but a significant setback from pre-pandemic levels. In August 2019, households earned 57.1% more than needed, and in August 2012, they earned 113% more.

The report highlights that pandemic boomtowns are seeing the steepest drops in income needed to afford a starter home, with Anaheim, CA experiencing the largest decline at 8.1% year over year. Four metros, all in Texas or Florida, have seen starter homes go from unaffordable to affordable in the past year.

Redfin reports that the U.S. home turnover rate has hit a 30-year low, with only 25 out of every 1,000 homes changing hands in the first eight months of 2024. This represents a 37.5% decrease from 2021's pandemic buying frenzy and a 31% drop from 2019. The low turnover is attributed to elevated mortgage rates, rising home prices, low supply, and economic uncertainty.

The rate of homes being listed for sale also fell to the lowest level in over a decade, with just 32 out of every 1,000 homes listed in the first eight months of 2024. Suburban and rural areas saw slightly higher turnover rates compared to urban areas. Among major metros, Phoenix had the highest turnover rate, while Los Angeles had the lowest.

Redfin reports that asking rents for newly constructed apartments fell to $1,746 in the second quarter, down 6.2% from a year earlier, reaching the lowest level in over two years. This decline coincides with a surge in new apartment completions, which rose 18.7% year-over-year in the first quarter, hitting the highest number in over a decade.

The report highlights that one-bedroom apartments saw the largest rent declines, dropping 9% to $1,566. Two-bedroom and three-or-more-bedroom apartments also experienced decreases, while studio apartments saw a slight increase. Redfin Senior Economist Sheharyar Bokhari suggests that rents for new apartments may continue to fall due to the ongoing construction boom, creating opportunities for renters in markets with high levels of new development.

Redfin reported a significant increase in mortgage-rate locks and home tours following the Federal Reserve's interest-rate cut. Mortgage-rate locks surged by 68% from the previous month, attributed to buyers waiting for the Fed's decision. Mortgage-purchase applications rose over 10% month-over-month, and Redfin's Homebuyer Demand Index hit its highest level since May, increasing 1% annually. Pending U.S. home sales fell 3.1% during the four weeks ending September 22, the smallest decline in five weeks. The median monthly housing payment dropped 4.4% year-over-year, the largest decline in over four years, due to falling mortgage rates. New listings of homes for sale increased by 7.6% year-over-year, the most significant rise since June.

Redfin reports that Bay Area homebuyers are seeing significant savings on monthly mortgage payments due to falling mortgage rates. The average 30-year mortgage rate dropped from 7.2% in late April to 6.1% in mid-September, leading to substantial decreases in monthly housing payments across major U.S. metros.

Key highlights:

• San Jose saw the largest drop, with payments falling by over $2,000 to $9,398
• San Francisco and Oakland followed with drops of $1,372 and $1,338 respectively
• 44 out of 47 analyzed metros experienced payment decreases
• Oakland led in percentage decline with a 19.1% drop

Redfin economists advise potential buyers to consider entering the market now, as mortgage rates are unlikely to fall much further and home prices may increase as demand returns.

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.