Redfin Corporation - RDFN STOCK NEWS

The median U.S. asking rent increased by 9% year over year in September, reaching $2,002. This marks the slowest growth since August 2021 and the first single-digit rise in a year.

Redfin's report indicates that rent growth has decelerated for four consecutive months, dropping to half the pace seen six months earlier. Key factors include rising supply and continued economic uncertainty affecting demand.

Oklahoma City and Pittsburgh exhibited the highest rent increases at 24.1% and 20% respectively, while Milwaukee faced the largest decline at -14.3%.

Homebuyer demand has notably declined as mortgage rates hit a 15-year high, significantly impacting purchasing power, which has dropped by 29% since early 2021. Key indicators from Redfin indicate a 6% decrease in the Homebuyer Demand Index, reaching the lowest level since June. Mortgage applications fell 13%, with tours down 7%. The median home sale price rose 7% year-over-year, while overall pending sales decreased by 25%. The monthly mortgage payment on median listings surged to $2,528, marking a 49% hike from last year.

The average U.S. homebuyer made a $62,500 down payment in July, a 13.6% increase from July 2022, nearly double the $32,917 median from July 2019. However, down payments have slightly decreased from their peak of $66,000 in May and June as the housing market cools, driven by high mortgage rates and inflation. Despite these challenges, 58.7% of homebuyers with mortgages made down payments greater than 10%. The report indicates that homebuyers are adjusting to lower competition and higher living costs, likely leading to a gradual decline in down payment amounts.

Redfin has partnered with Down Payment Resource to add down payment assistance information to its home listings, addressing the growing need for such programs amid rising home prices. With the national median home price up 40% since the pandemic, the median down payment for buyers has increased to $62,500, nearly double the amount from July 2019. This initiative aims to support first-time buyers, especially as many perceive down payments as a barrier to homeownership. Users can now easily find assistance programs tailored to their needs on Redfin's platform.

Redfin reports that rising mortgage rates and elevated home prices have reduced housing affordability in San Diego. A buyer with a $3,000 monthly budget can now afford a 931-square-foot home, down from 1,366 square feet last year. This trend reflects a 435-square-foot drop, the largest among major U.S. metros. Home prices in San Diego increased by 7% year-over-year, reaching a median of $800,000. The report suggests that buyers are increasingly forced to settle for smaller homes due to the financial impact of high mortgage rates.

The rising mortgage rates have significantly impacted the housing market, with typical monthly payments increasing by $337 (15%) to $2,547. A report from Redfin indicates that pending home sales have reached their lowest level since January, while the share of homes sold above list price has fallen to a two-year low. Homeowners are hesitant to sell due to high rates, leading to a three-month supply of homes. The report highlights that 35% of homes accepted offers within two weeks, reflecting a slowdown in activity as the housing market adjusts to current economic conditions.

Redfin reports significant volatility in mortgage rates affecting homebuyers. A typical buyer looking for a $500,000 home saw their potential total mortgage payment fluctuate significantly, dropping by $64,000 from July to August, then rising by $118,000 from August to September. As mortgage rates oscillate due to the Federal Reserve's interest rate hikes, the current rate stands at 6.29%, the highest since 2008. The volatility is impacting affordability, complicating buyers' planning, although refinancing may become an option in the future.

Redfin's recent report highlights that housing markets in affordable Midwest and East Coast areas are stabilizing amid rising mortgage rates and economic uncertainty. Lake County, IL tops the list of resilient markets, followed by Albany, NY, and Chicago. The majority of these markets feature lower-than-national median home prices. Despite challenges, homebuyer demand remains strong, with notable declines in home sales and price drops compared to last year, hinting at a slower cooling trend in these regions.