Redfin Corp - RDFN STOCK NEWS

The housing market's inventory crunch eased in April, with homes for sale down just 9% year-over-year, the smallest decline since March 2020. Despite record-low inventory, home sales fell by 8%, leading to a slight slowdown in home price growth, which increased by 16% to $424,000. The average sale-to-list ratio hit a record 103.2%. In April, 59% of homes sold above list price, the highest level since 2013. While prices increased across major metros, sales declined in most areas, particularly in West Palm Beach, where they fell by nearly 30%.

Redfin's recent analysis shows that homebuyers could save approximately $15,582 over five years by opting for an adjustable-rate mortgage (ARM) instead of a 30-year fixed mortgage, equating to around $260 monthly. This represents the largest savings since 2015. The typical monthly payment for a 5/1 ARM stands at $2,164, which is 11% lower than that of a fixed-rate mortgage at $2,423. As mortgage rates rise, ARMs are gaining popularity, comprising 10.8% of mortgage applications—an increase from 3.1% at the start of the year.

Redfin reported a shift in the housing market as more sellers enter while demand is declining due to rising mortgage rates. The report covering the four weeks ending May 15 indicates a 16% year-over-year increase in median home sale prices to $398,500 and a record asking price of newly listed homes at $416,425. However, mortgage applications hit their lowest since May 2020, with a notable decline in homebuyer activity. Even with these challenges, homes are selling rapidly, averaging 15 days on the market, reflecting a mixed but evolving real estate landscape.

The latest report from Redfin reveals that 60.7% of home offers by its agents faced bidding wars in April 2022, a decline from 63.4% in March and 67.4% a year prior. This is attributed to rising mortgage rates, currently at 5.3%, which have more buyers withdrawing from the market. The average monthly mortgage payment surged 44% year-over-year to $2,427. Riverside, CA saw the largest competition drop, down 22.9 points from last year. Townhouses remain the most competitive property type with a 69.5% bidding war rate, while homes are taking longer to sell as market conditions cool.

In April, the median monthly asking rent in the U.S. surged 15% year-over-year to a record $1,962, marking a slowdown from March's 17% increase. Key metropolitan areas like Austin, Portland, and South Florida experienced even higher hikes, with Austin seeing a staggering 46% rise, the largest recorded since 2019. While the overall rental growth indicates potential effects of the Federal Reserve's interest rate strategy, rents still outpace inflation, putting pressure on tenants. Only three of the 50 largest metros reported declines in rents, highlighting ongoing rental market challenges.

Redfin Corporation (NASDAQ: RDFN) announced that CFO Chris Nielsen will present at the 17th Annual Needham Technology & Media Conference on May 18, 2022, at 11:00 a.m. ET. Investors can access the live webcast and replay through Redfin's investor relations site.

Redfin is a technology-driven real estate company providing brokerage, iBuying, rentals, lending, and renovations services. They have saved customers over $1 billion in commissions since 2006 and operate in over 100 U.S. and Canadian markets, employing over 6,000 staff.

Redfin reports a unique paradox in the housing market: while demand is dwindling due to soaring mortgage rates, home sales are accelerating. During the week ending May 8, homes sold in a record 15 days on average. However, pending sales saw a 6% year-over-year decline, marking the steepest drop since June 2020. The typical monthly mortgage payment skyrocketed 44% to $2,427. Despite increased price drops, 57% of homes sold over the asking price, with a median home sale price hitting a record $397,356. Active listings decreased 17% year-over-year.

The housing market is seeing significant price adjustments as 15% of home sellers reduced their asking prices by May 1, marking a six-month high and up from 9% a year ago. Meanwhile, typical mortgage payments have surged 42% to $2,404, forcing buyers to reassess their options. Despite these trends, homes are still selling quickly, often above asking prices, as active listings dropped 18% year over year. Redfin’s report indicates a competitive market, with the median home sale price reaching $396,125, reflecting a 17% annual increase.

Redfin Corporation (NASDAQ: RDFN) reported first-quarter 2022 revenue of $597.3 million, up 123% year-over-year, with gross profit increasing 71% to $72.5 million. However, a net loss of $90.8 million was reported, compared to $35.8 million in Q1 2021. Real estate services gross profit fell 41% year-over-year, with a gross margin of 13%. Key highlights included reaching a 1.18% market share in U.S. existing home sales and the acquisition of Bay Equity Home Loans. The company aims to enhance customer experience through improved software and expanded services.