Redfin Corp - RDFN STOCK NEWS

The housing market is experiencing an unprecedented surge in supply, with homes for sale increasing by 18% year-over-year, the largest rise since 2015. This uptick occurs despite a decline in new listings and homes taking longer to sell due to high mortgage rates, which have now averaged 6.42%. Redfin's Homebuyer Demand Index reflects a 14% increase in demand from October lows, although pending home sales are down 31.8% year-over-year. Prices fell in 17 out of the 50 largest U.S. metros, indicating a shift in buyer behavior amid economic uncertainty.

Sales of luxury U.S. homes fell by 38.1% year over year for the three months ending November 30, 2022, marking the largest decline on record, according to Redfin. This drop outpaced the 31.4% decline in non-luxury home sales. Factors contributing to this decline include economic stress, high inflation, and a sagging stock market. Despite the downturn, there are early signs of renewed buyer interest as mortgage rates decrease. The supply of luxury homes for sale rose by 5.2%, the largest increase since 2016, while home-price growth slowed to 10%.

Redfin reports a slight revival in buyer interest as home prices and mortgage rates decline. The typical U.S. home price is now $352,000, down 10% from June's peak of $391,000. Mortgage rates have fallen to 6.27%, reducing monthly payments by nearly $300. However, sales have not yet increased, with pending home sales down 32.6% year-over-year. Notably, home prices in 14 major U.S. metros have decreased year-over-year, with significant declines recorded in cities like San Francisco and Phoenix.

Redfin reported a significant slowdown in the housing market for November 2022, with home sales falling 35.1% year-over-year, marking the steepest decline since 2012. The median home sale price rose only 2.6%, the lowest increase since May 2020. New listings dropped 28.4% year-over-year, while overall supply increased by 4.6%. Despite early signs of demand returning due to falling mortgage rates, total sales remain low. The average 30-year fixed mortgage rate was recorded at 6.81%, up 3.74 percentage points from last year, impacting buyer activity.

In October, all-cash home purchases in the U.S. reached 31.9%, marking the highest percentage since 2014, up from 29.9% a year prior. This increase is attributed to affluent buyers wanting to avoid high mortgage rates, currently above 6%. FHA loans also gained popularity, representing 14.6% of mortgaged sales, the highest in nearly two years. Notably, cash purchases surged in Riverside, CA (38%) and Cleveland (47%). Conversely, the Bay Area saw the lowest all-cash rates, at 14.3%.

Redfin reports that in the three months ending in November, 24.1% of homebuyers sought to relocate to a different metro area, matching a record high. Rising mortgage rates and inflation are impacting budgets, leading to a significant drop of over 30% in home sales year-over-year. Sacramento emerged as the top destination for relocation, while migration flows to popular areas like Las Vegas and Miami are decreasing. The trend reflects a shift towards more affordable locations as remote workers adjust to economic pressures.

Redfin's Homebuyer Demand Index has increased by 10% and mortgage-purchase applications have risen by 14% since October's lows. The decline in mortgage rates to 6.31% from a peak of 7.08% is driving this uptick, saving typical homebuyers over $200 monthly. However, year-over-year metrics indicate a significant drop in demand, with pending home sales down more than 30% and homes selling at the slowest rate in two years. The median home-sale price only rose 1.4%, the slowest growth since the pandemic started.

Redfin reports that only 3.4% of U.S. homeowners who purchased in the last two years would be underwater if home prices fall 4% by the end of 2023. The report indicates a typical home bought during this period would still gain approximately $27,000 in value. Areas such as Sacramento and Phoenix have higher risks of underwater mortgages, while Florida homeowners face the least risk. Despite potential price declines, a foreclosure crisis is not expected, though middle-class homeowners may see significant wealth loss.

The median asking rent in the U.S. rose by 7.4% year-over-year to $2,007 in November, marking the slowest growth rate in 15 months. This trend indicates a cooling rental market, with rents decreasing in 14 major metro areas, including Milwaukee (-13.1%) and Houston (-6.3%). Contrarily, Raleigh, NC saw the highest rent increase at 21.8%. Experts predict continued cooling in rent growth, which may contribute to reduced overall inflation and potentially lower mortgage rates, attracting more homebuyers to the market.