Redfin Reports New Listings Rose to the Highest Level in 17 Months in February

Rhea-AI Summary

Housing supply is gradually rebounding, but not enough to slow down home price growth. New listings and active listings are up, with the highest levels in months. Home prices continue to rise due to supply. Mortgage rates are climbing, impacting home sales. Redfin reports positive trends in housing supply and prices in February 2024.

Insights

Economist

The recent data from Redfin indicates a shift in the housing market dynamics, with new listings and active listings showing signs of recovery. This is an important development for the economy, as housing is a significant component of gross domestic product (GDP) and consumer spending. The increase in supply, if sustained, could help to moderate the rapid price growth seen in recent years, potentially easing inflationary pressures. However, the uptick in mortgage rates could dampen demand, leading to a more balanced market but also potentially slowing down economic growth if housing sales decline significantly.

Furthermore, the regional differences highlighted, with Texas and Florida leading in new and active listings, suggest that local economic conditions and state-specific factors such as building regulations and population growth trends are influencing the housing supply dynamics. This uneven recovery could have implications for regional economic performance and inter-state migration patterns.

Real Estate Market Analyst

The data presents a nuanced picture of the housing market. While the year-over-year increase in new listings is the largest since May 2021, the overall supply remains below pre-pandemic levels. This suggests that while the 'lock-in effect'—where homeowners are reluctant to sell due to low mortgage rates—is beginning to ease, it is not yet resulting in a supply sufficient to fully meet pent-up demand.

The robust price growth, with the median U.S. home sale price experiencing the biggest increase in nearly a year and a half, reflects this imbalance between supply and demand. In markets like Seattle, where a significant share of homes go under contract within two weeks, the competitive environment persists. This could indicate a seller's market in certain areas, despite the national trends towards increased supply.

Financial Analyst

From an investment perspective, the housing market's current trajectory could have mixed implications for businesses and the stock market, particularly for companies in the real estate, construction and mortgage industries. While increased housing supply and steady price growth could signal stability and opportunities for real estate companies, the elevated mortgage rates could suppress homebuyer demand, potentially affecting the revenue streams of mortgage lenders and homebuilders.

Investors should monitor the Federal Reserve's interest rate decisions closely, as these will influence mortgage rates and, by extension, the housing market's performance. The report's mention of mortgage-purchase applications sliding in February correlates with the uptick in mortgage rates, underscoring the sensitivity of the housing market to interest rate fluctuations.

Housing supply is finally rebounding as sellers get used to elevated mortgage rates, but it’s not rebounding enough to curb home price growth. High housing costs mean many house hunters remain hesitant to commit.

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) — New listings jumped 3.8% month over month on a seasonally adjusted basis in February to the highest level since September 2022, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. They were up 14.8% year over year, the largest annual gain since May 2021.

Active listings, or the total supply of homes for sale, hit the highest level in a year. They climbed 0.8% from a month earlier on a seasonally adjusted basis, and were little changed (-0.1%) from a year earlier–the smallest annual decline in months.

New listings rose fastest from a year earlier in Texas and active listings rose fastest in Florida–the two states that have been building the most homes. In Florida, condo listings in particular are contributing to the jump in supply amid a surge in HOA and insurance fees.

“The housing market is nothing like it was two years ago during the pandemic homebuying frenzy, but it’s better than it was last year. It’s coming back,” said David Palmer, a Redfin Premier real estate agent in Seattle. “Sellers who were on the fence in 2023 are now listing. They’re more used to elevated rates now. There still aren’t enough listings to quench pent-up buyer demand, but it’s getting better.”

Nationwide, housing supply is on the rise because the “lock-in effect” is easing; eventually, homeowners who have been holding on to their ultra-low mortgage rates simply have to move.

“February was a mixed bag for the housing market and the economy,” said Redfin Economics Research Lead Chen Zhao. “Housing supply is finally starting to recover in a meaningful way, which is great news for buyers who for months have been competing for a tiny pool of homes for sale. Still, many house hunters are hesitant to pull the trigger because mortgage rates and home prices remain elevated.”

Mortgage-purchase applications slid in February as mortgage rates ticked back up after dropping in December. The average 30-year-fixed mortgage rate was 6.78% last month, up from 6.64% in January. Mortgage rates will likely remain elevated a bit longer than expected after this week’s inflation report came in hotter than anticipated.

Home sales rose 0.5% month over month on a seasonally adjusted basis in February, and fell 3.5% year over year.

Home Prices Post Biggest Increase in Nearly a Year and a Half

The median U.S. home sale price climbed 6.6% year over year–the biggest uptick since September 2022–to $412,778. Please note that home price data is not seasonally adjusted, which is why Redfin focuses on year-over-year changes for this metric.

Prices continue to rise because despite the recent uptick in listings, there’s still not enough supply to meet demand. Both new listings and active listings remained far below pre-pandemic levels in February.

“If you price your home reasonably, buyers will show up. If you don’t, buyers will wait for you to drop the price,” Palmer said. “I recently listed an estate sale fixer upper for $550,000 and it got 14 offers, sold for $75,000 over the asking price and the buyer waived every contingency.”

In Seattle, 77.4% of homes that went under contract did so within two weeks–the highest share among the metros Redfin analyzed. It took the top spot from Rochester, which has held that title for months. The typical home that went under contract in Seattle did so in 11 days (versus a national median of 48 days).

February 2024 Highlights: United States

	February 2024	Month-Over-Month Change	Year-Over-Year Change
Median sale price	$412,778	2.7%	6.6%
Homes sold, seasonally adjusted	422,203	0.5%	-3.5%
New listings, seasonally adjusted	548,285	3.8%	14.8%
All homes for sale, seasonally adjusted (active listings)	1,601,260	0.8%	-0.1%
Months of supply	2.7	-0.5	0
Median days on market	48	-2	-5
Share of for-sale homes with a price drop	16.1%	-0.1 ppts	2.9 ppts
Share of homes sold above final list price	26.1%	2 ppts	2.6 ppts
Average sale-to-final-list-price ratio	98.7%	0.4 ppts	0.5 ppts
Average 30-year fixed mortgage rate	6.78%	0.13 ppts	0.52 ppts

Metro-Level Highlights: February 2024

• New listings: New listings rose most from a year earlier in Austin, TX (44.6%), Dallas (38.1%) and Charleston, SC (36.8%). They fell in two metros–Albany, NY (-2.9%) and Buffalo, NY (-0.7%) –and were flat in Fresno, CA (0%).
• Active listings (total supply): Active listings increased fastest in Cape Coral, FL (60.6%), North Port, FL (52.5%) and Fort Lauderdale, FL (25.5%). They decreased fastest in Raleigh, NC (-24.4%), New Brunswick, NJ (-19%) and Nassau County, NY (-18.5%).
• Prices: Median sale prices rose most from a year earlier in Newark, NJ (16.5%), Anaheim, CA (15.8%) and Grand Rapids, MI (15.8%). They fell in three metros: San Antonio (-4.2%), Memphis, TN (-3.5%) and North Port (-2.2%).
• Closed home sales: Closed sales rose most in San Jose, CA (24.9%), San Francisco (21.1%) and Dayton, OH (15.1%). They fell most in Frederick, MD (-14.8%), New Orleans (-14.2%) and Tulsa, OK (-14%).
• Sold above list price: In San Jose, 65.3% of homes sold above their final list price, the highest share among the metros Redfin analyzed. Next came Rochester, NY (62.8%) and Oakland, CA (62.3%). The shares were lowest in North Port (6.6%), Cape Coral (8.3%) and West Palm Beach, FL (8.7%).
• Off market in two weeks: In Seattle, 77.4% of homes that went under contract did so within two weeks—the highest share among the metros Redfin analyzed. Next came Rochester (75%) and San Jose (70.9%). The lowest shares were in Honolulu (8.4%), Greensboro, NC (19%) and McAllen, TX (20.8%).
• Days on market: The typical home that went under contract in Seattle did so in 11 days, making the fastest market among those Redfin analyzed. Next came Rochester (12) and San Jose (12). The slowest markets were New Orleans (97), Austin (82) and Honolulu (77).

To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-tracker-february-2024

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/20240315811247/en/

Redfin Journalist Services:

Ally Braun, 206-588-6863

press@redfin.com

Source: Redfin

FAQ

What is the NASDAQ ticker symbol for Redfin?

The NASDAQ ticker symbol for Redfin is RDFN.

What were the month-over-month and year-over-year changes in new listings in February 2024?

New listings rose 3.8% month over month and 14.8% year over year in February 2024.

How did active listings change year over year in February 2024?

Active listings were little changed (-0.1%) from a year earlier in February 2024.

What was the median U.S. home sale price in February 2024?

The median U.S. home sale price in February 2024 was $412,778.

What was the average 30-year fixed mortgage rate in February 2024?

The average 30-year fixed mortgage rate in February 2024 was 6.78%.