Redfin Report: New Listings Post Biggest Uptick In Nearly 3 Years, But Buyers Show Restraint as Rates Rise

Rhea-AI Summary

Redfin reports a 13% increase in new listings of U.S. homes for sale, with total inventory remaining flat. Despite more homes on the market, high mortgage rates and housing costs are impacting sales. Pending sales have decreased by 8% due to high costs, but buyer demand is up, indicating a potential improvement in sales if rates stabilize.

Insights

Market Research Analyst

The recent surge in new home listings, as reported by Redfin, indicates a potential shift in the housing market, which could have broader implications for consumer spending and the construction industry. The increase in supply, with active listings remaining flat year over year, suggests a stabilization in inventory levels that could alleviate some of the upward pressure on home prices. However, the persistence of high mortgage rates and elevated home prices continues to dampen sales activity, as evidenced by the decline in pending sales and mortgage-purchase applications.

From a market perspective, the real estate sector's performance is a key economic indicator, often influencing stock market sectors such as home construction, retail and financial services. A slowdown in home sales can impact the revenue streams of companies within these sectors, potentially affecting their stock prices. Conversely, an increase in inventory and a potential plateau in price growth could attract more buyers, stabilizing the market and possibly benefiting companies that rely on housing market growth.

Financial Analyst

The fluctuations in mortgage rates, particularly the recent uptick to 7%, have a direct impact on the affordability of housing and consequently the volume of sales. For the real estate industry and mortgage lenders, this translates to a potential decrease in revenue and profits, which can affect their stock valuations. Investors and analysts closely monitor such data as it can serve as a leading indicator for the health of the real estate market and the economy at large.

Furthermore, the increase in median sale and asking prices, despite the market challenges, may signal continued demand and could suggest resilience in the housing market. However, this dynamic also raises concerns about the long-term affordability of housing for the average consumer, which could have downstream effects on consumer spending and the broader economy.

Economist

The interplay between mortgage rates, home prices and inventory levels provides critical insights into the state of the economy. High mortgage rates tend to suppress demand, as seen in the reduction of pending sales and mortgage-purchase applications. This could lead to a deceleration in home price growth, which may have a deflationary effect on the housing market. The economic ripple effects of such a slowdown could be significant, potentially leading to reduced consumer confidence and spending, which are vital drivers of economic growth.

Moreover, the regional disparities in housing market performance, with some metros experiencing price increases while others see decreases, underscore the uneven economic recovery and growth across different areas. This regional variation can influence local economies and, by extension, the performance of local businesses and regional stock markets.

More sellers are listing their homes, but 7% mortgage rates and still-high home prices are pushing down sales

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) —New listings of U.S. homes for sale rose 13% year over year during the four weeks ending February 25, the biggest increase in nearly three years, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Total inventory is also improving: Active listings are flat from a year ago, marking the first time in nine months the total number of homes for sale hasn’t declined.

That’s welcome news for homebuyers, who have been battling the dual challenges of low inventory and high mortgage rates for over a year. But while today’s buyers have a few more homes to choose from, they’re still facing historically high housing costs. The typical homebuyer’s mortgage payment is $2,671, just $47 shy of last October’s record high.

High costs pushed pending sales down 8%, the biggest decline in five months, and mortgage-purchase applications declined for the fourth straight week. But more house hunters are searching as more homes hit the market. Redfin’s Homebuyer Demand Index–a measure of requests for tours and other services from Redfin agents–is up 10% from a month ago to its highest level since last September. Pending sales could improve in the next few months if rates don’t increase further and new listings continue to rise.

“House hunters are out there, and competition picks up every time mortgage rates decline a bit,” said Brynn Rea, a Redfin Premier agent in Spokane, WA. “I’m telling buyers who can afford it to look now while they have more breathing room and less competition. They have a good chance of negotiating the price down or getting some concessions from the seller, which could make up for getting a 7% mortgage rate instead of 6%.”

Leading indicators

Indicators of homebuying demand and activity
	Value (if applicable)	Recent change	Year-over-year change	Source
Daily average 30-year fixed mortgage rate	7.15% (Feb. 28)	Up from 6.92% a month earlier	Up from 6.78%	Mortgage News Daily
Weekly average 30-year fixed mortgage rate	6.9% (week ending Feb. 22)	Up from 6.77% a week earlier	Up from 6.5%	Freddie Mac
Mortgage-purchase applications (seasonally adjusted)		Down 5% from a week earlier (as of week ending Feb. 23)	Down 12%	Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)		Up 8% from a week earlier; up 10% from a month earlier (as of week ending Feb. 25)	Down 9%	Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents
Google searches for “home for sale”		Up 7% from a month earlier (as of Feb. 24)	Down 8%	Google Trends
Touring activity		Up 12% from the start of the year (as of Feb. 25)	At this time last year, it was up 14% from the start of 2023	ShowingTime, a home touring technology company

Key housing-market data

U.S. highlights: Four weeks ending February 25, 2024 Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.
	Four weeks ending February 25, 2024	Year-over-year change	Notes
Median sale price	$365,888	5.4%	Biggest increase since Oct. 2022 (with the exception of the 4 weeks ending Feb. 11, when there was a 5.5% increase)
Median asking price	$396,975	5.5%
Median monthly mortgage payment	$2,671 at a 6.9% mortgage rate	7.7%	Down less than $50 from all-time high set in October 2023
Pending sales	75,947	-7.7%	Biggest decline since Oct. 2022
New listings	79,354	12.9%	Biggest increase since June 2021
Active listings	763,254	Unchanged	First time active listings haven’t posted a YoY decline since June 2023
Months of supply	3.9 months	+0.2 pts.	4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions
Share of homes off market in two weeks	37.9%	Up from 36%
Median days on market	48	-3 days
Share of homes sold above list price	23.6%	Up from 22%
Share of homes with a price drop	5.8%	+1.6 pts.
Average sale-to-list price ratio	98.4%	+0.4 pts.

Metro-level highlights: Four weeks ending February 25, 2024 Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy.
	Metros with biggest year-over-year increases	Metros with biggest year-over-year decreases	Notes
Median sale price	Newark, NJ (15.5%) San Diego, CA (15.3%) Montgomery County, PA (14.5%) Pittsburgh (13.9%) Anaheim, CA (13.5%)	San Antonio, TX (-5%) Detroit (-0.4%)	Declined in 2 metros
Pending sales	Austin, TX (5.7%) Milwaukee (3.7%) Minneapolis (2.6%) Cleveland (1.2%) Pittsburgh (0.6%) Cincinnati (0.6%)	San Antonio, TX (-29.8%) New Brunswick, NJ (-19.4%) Warren, MI (-18.3%) Atlanta (-16%) Houston (-15.6%)	Increased in 6 metros
New listings	Dallas (35.5%) Jacksonville, FL (34.3%) Austin, TX (31.6%) Fort Worth, TX (29.8%) Miami (25.7%)	Atlanta (-5.8%) Newark, NJ (-5.4%) Milwaukee (-4.6%) Providence, RI (-4.3%) Chicago (-1.5%) Warren, MI (-0.9%)	Declined in 6 metros

To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-update-new-listings-increase-pending-sales-decline/

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We run the country's #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can have our renovations crew fix it up to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1.6 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.

Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans^®, Rent.™, Apartment Guide^®, Title Forward^® and WalkScore^®.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240229170002/en/

Redfin Journalist Services:

Kenneth Applewhaite, 206-414-8880

press@redfin.com

Source: Redfin

FAQ

What was the year-over-year change in new listings of U.S. homes for sale according to Redfin?

Redfin reported a 13% increase in new listings of U.S. homes for sale.

What is the current typical homebuyer's mortgage payment?

The typical homebuyer's mortgage payment is $2,671.

What is the year-over-year change in pending sales?

Pending sales have decreased by 7.7% year-over-year.

What is the current median sale price of homes according to Redfin?

The current median sale price of homes is $365,888.

What is the share of homes off the market in two weeks?

The share of homes off the market in two weeks is 37.9%.