Redfin Corporation - RDFN STOCK NEWS

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%.

Redfin (NASDAQ: RDFN) reports that commission negotiations have become more common in some markets and for higher-priced homes following new National Association of Realtors rules. The impact varies by location, with slow markets seeing little change and competitive markets experiencing more fee discussions. Most sellers are still willing to cover buyer's agent fees, but some are now asking buyers to make their best offer.

Key findings include:

• Typical buyer's agent commission slightly decreased to 2.55%
• Buyers are confused about signing fee agreements before home tours
• Luxury market sees more pressure on commissions
• Sellers are evaluating fee strategies based on market conditions
• Some listing agents are finding creative ways to communicate fee offers

Redfin (NASDAQ: RDFN) has announced the nationwide expansion of its Redfin Next agent compensation plan, effective October 27th. This plan offers agents competitive commission splits up to 75%, covers virtually all business expenses, and provides technology, support, benefits, and customer introductions from Redfin.com. The expansion follows strong business and recruiting results in initial markets.

Key features of Redfin Next include:

• Big splits with zero expenses
• Access to over 100 potential customers annually
• Comprehensive business support and technology
• Top-tier benefits package

Redfin reports that rental affordability has improved for college graduates in the Bay Area. In San Jose, recent grads now spend 27.8% of their income on rent for a 2-bedroom apartment with a roommate, down from 30.9% in 2023. Similar improvements are seen in San Francisco and Sacramento. The Bay Area boasts the highest salaries for college grads nationwide, with San Jose leading at $108,499.

Nationally, the typical U.S. college grad spends 20.6% of income on rent with a roommate, down from 22.6% last year. This improvement is attributed to falling rents and rising wages. Austin, TX is now affordable for grads living alone, with rent costs dropping to 28.3% of income from 35.2% last year. Cincinnati, Houston, and Austin are the most affordable metros for recent grads sharing apartments.