Redfin Corp - RDFN STOCK NEWS

Redfin (RDFN) has expanded its Redfin Premier luxury real estate service to over 100 markets nationwide, allowing consumers to collaborate with top agents. This service targets high-end buyers and sellers, emphasizing a personalized experience. Redfin Premier agents, who rank in the top 1% nationally, close nearly three times more luxury deals than standard agents. The service offers lower listing fees of 1% for buyers and sellers, leading to higher proceeds for clients. Enhanced marketing strategies, including professional photography and virtual tours, further attract qualified buyers. Redfin aims to redefine luxury service in real estate.

Redfin's recent report indicates a significant shift in the housing market, with home sellers offering concessions in 45.5% of sales during the three months ending February 28, 2023, the highest share since June 2020. This marks an increase from 31.1% a year earlier. The rise in concessions is attributed to higher mortgage rates and persistent home prices, prompting sellers to incentivize buyers. Notably, 13% of sales featured price cuts alongside concessions. Seattle recorded the largest increase in concessions, with 51.6% of sales including them. Las Vegas had the highest overall concessions at 77.4% of sales.

The median U.S. asking rent rose 1.7% year-over-year to $1,937 in February, marking the smallest increase in almost two years. This slow growth is attributed to high housing costs and rising supply, with the number of apartments under construction up 24.9% to 943,000, the highest since 1974. February also saw a 0.3% month-over-month decline in rent, continuing a nine-month trend of slowing growth. While some areas experienced rent decreases, such as Austin and New Orleans, others like Charlotte saw increases. Landlords are adjusting to higher vacancies and may offer concessions to attract renters.

Sales of luxury U.S. homes fell a record 44.6% year-over-year ending January 31, 2023, outpacing a 37.5% decline in non-luxury homes, as reported by Redfin. In Miami, luxury sales dropped 68.7%, followed by Nassau-Suffolk County, NY (-62.6%) and Riverside (-59.8%). The slump stems from high mortgage rates, inflation, and economic uncertainty, prompting wealthy buyers to seek alternatives. Despite this, luxury home prices rose 9% to a median of $1.09 million, remaining near their peak. While luxury home supply increased by 7.1%, new listings fell by 6.6%, indicating a continued supply shortage amidst decreased demand.

The latest report from Redfin highlights the impact of elevated mortgage rates on the housing market, with average monthly payments reaching a record high of $2,563, up 29% year-over-year. Despite a 1% decline in home prices, affordability has worsened significantly, with potential homebuyers now able to afford only a $376,000 home on a $2,500 budget, down from $480,000 a year ago. Pending home sales dropped 16.1% year-over-year, and new listings fell 21.7%. The continued rise in mortgage rates signals a challenging environment for both buyers and sellers.

Redfin reports that the share of U.S. homes valued at least $1 million has decreased to 7% from 8.6% in June 2022, reflecting a cooling housing market. This change is attributed to higher mortgage rates, currently at 6.6%, leading to increased monthly payments for buyers. In contrast, Florida sees gains, with 14.4% of Miami homes valued at a million or more, up from 11.5% last year. Coastal cities like San Francisco and Seattle have experienced sharp declines in high-value homes, as tech layoffs and remote work reduce demand. Overall, 70 out of 99 major U.S. metros report an increase in million-dollar homes.

In 2022, only 21% of U.S. homes were affordable for typical households, a decrease from 40% in 2021, marking the lowest share on record. The drop was driven by a 53% decline in affordable listings and rising mortgage rates, now averaging 6.65%. Home prices surged 32% since the pandemic, contributing to the crisis. Black households faced a significant disparity, with only 9% of homes affordable compared to 28% for white households. The Biden administration's cuts to mortgage-insurance rates, effective March 20, aim to assist low-income buyers. Although the landscape is challenging, analysts anticipate improvements in affordability as rates stabilize and incomes rise.

The U.S. home-sale price median dipped 0.6% year-over-year in February, marking its first decline since 2012, amid rising mortgage rates averaging 7.1%. The typical home sold for $350,246 during the four weeks ending February 26. Monthly mortgage payments reached a record high of $2,520, exacerbating affordability issues. Despite a drop in homebuying demand, the Redfin Homebuyer Demand Index showed an increase, indicating some recovery from last fall. However, mortgage applications reached their lowest since the 1990s. Home prices are expected to decline slightly further, constrained by limited listings and continued interest in desirable homes.

Redfin reports that the typical U.S. homeowner has spent 12.3 years in their home, down from a peak of 13.4 years in 2020. Despite this decrease, homeowner tenure has nearly doubled over the last two decades, driven by older Americans aging in place and a lack of affordability. Homeowners face record-high mortgage payments, low housing inventory, and are disincentivized to move due to low mortgage rates. California homeowners tend to stay the longest, averaging 18.2 years in Los Angeles. The increasing age of the population and ongoing housing supply issues suggest that homeowner tenure may rise again in the coming years.