Redfin Reports Supply Climbs 5%, Biggest Increase in Nearly a Year

Rhea-AI Summary

The U.S. housing market is seeing a surge in new listings and inventory, attracting buyers despite price growth. Redfin reports a 5% increase in homes for sale, with a 15% rise in new listings. Mortgage rates are up, but Redfin economists expect a gradual decline in 2024. Median home sale prices have increased by 5.3% year over year, reaching the second-highest level since October 2022.

Insights

Market Research Analyst

The recent uptick in housing inventory, coupled with a significant rise in new listings, suggests a shift towards a more balanced market, potentially easing the competitive pressure on buyers. However, the persistence of high median sale and asking prices indicates that housing affordability remains a challenge. The increase in active listings and the largest year-over-year rise in new listings since June 2021 could signal a gradual shift from a seller's to a more buyer-friendly market, although the median monthly mortgage payment nearing its all-time high reflects the ongoing strain on buyers due to elevated mortgage rates.

From a market research perspective, the increase in homebuyer demand, as evidenced by the rise in mortgage-purchase applications and the Redfin Homebuyer Demand Index, is a positive sign for the real estate industry. However, the potential for mortgage rates to gradually decline throughout 2024 could influence buyer behavior, with some possibly waiting for more favorable rates. This dynamic needs to be monitored as it could impact the pace of home sales and price adjustments.

Financial Analyst

Observing the housing market's performance is critical for understanding broader economic trends and consumer confidence. The 5.3% year-over-year increase in median sale prices, despite the growth in inventory, suggests that the housing market remains robust, which can be a positive indicator for the economy. However, the high median monthly mortgage payment poses a risk for potential buyers, potentially affecting loan performance and the financial health of mortgage lenders.

Investors should note the regional disparities highlighted in the report, with certain metro areas experiencing significant price increases, while others like San Antonio show a decline. These variations can impact regional bank stocks, construction companies and real estate investment trusts (REITs), which may see differing performance based on local market conditions. The long-term outlook for mortgage rates, as suggested by Redfin economists, could also influence the investment strategy for financial instruments tied to the housing market, such as mortgage-backed securities.

Economist

The data on housing supply and mortgage rates is indicative of the interplay between supply-side factors and monetary policy. The increase in supply may help to moderate the rapid price growth seen in recent years, potentially leading to a more stable housing market. However, the Federal Reserve's decision to hold interest rates steady could have mixed effects. On one hand, it may encourage buyers to enter the market before rates rise again. On the other, if inflationary pressures persist, the Fed may be compelled to increase rates, which would affect mortgage affordability and could dampen demand.

Additionally, the 3.4 months of supply reported, while an increase, still indicates a seller's market. A balanced market is typically characterized by 4 to 5 months of supply. The economic implications of a sustained seller's market include continued upward pressure on prices and potential constraints on first-time homebuyers, which could affect consumer spending and economic growth.

The supply of homes for sale is picking up in time for spring homebuying season, and improving inventory is attracting some buyers

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) —The total number of U.S. homes for sale climbed 5% during the four weeks ending March 17, the biggest year-over-year uptick since May 2023, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. New listings rose 15%, the biggest increase since June 2021.

The surge in listings is bringing some buyers back to the market. Mortgage-purchase applications and Redfin’s Homebuyer Demand Index—a measure of requests for tours and other buying services from Redfin agents—are each up roughly 9% month over month.

Increasing inventory has yet to dampen price growth. The median U.S. home-sale price is up 5.3% year over year, the second-biggest increase since October 2022, and the median monthly mortgage payment is just $31 shy of its all-time high due to elevated mortgage rates and prices. Redfin economists expect mortgage rates to gradually decline throughout 2024, an outlook that was little changed in the wake of this week’s Fed press conference, in which the Fed held interest rates steady.

For more of Redfin economists’ takes on the housing market, including how current financial events are impacting mortgage rates, please visit our “From Our Economists” page.

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	7.03% (March 20)	Up from 6.92% a week earlier	Up from 6.67%	Mortgage News Daily
Weekly average 30-year fixed mortgage rate	6.74% (week ending March 14)	Down from 6.88% a week earlier; first decline after 5 weeks of increases	Up from 6.6%	Freddie Mac
Mortgage-purchase applications (seasonally adjusted)		Down 1% from a week earlier; up 9% from a month earlier (as of week ending March 15)	Down 14%	Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)		Up 8% from a month earlier (as of week ending March 17)	Down 5%	Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents
Google searches for “home for sale”		Essentially unchanged from a month earlier (as of March 18)	Down 18%	Google Trends
Touring activity		Up 29% from the start of the year (as of March 19)	At this time last year, it was up 19% from the start of 2023	ShowingTime, a home touring technology company

Key housing-market data

U.S. highlights: Four weeks ending March 17, 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 March 17, 2024	Year-over-year change	Notes
Median sale price	$374,047	5.3%	Biggest increase since Oct. 2022 (except the 4 weeks ending Feb. 11, when there was a 5.4% increase)
Median asking price	$404,273	5.7%
Median monthly mortgage payment	$2,685 at a 6.74% mortgage rate	8.5%	Just $31 shy of all-time high set in October 2023
Pending sales	82,464	-4.4%
New listings	88,902	15.1%	Biggest increase since June 2021
Active listings	795,645	4.9%	Biggest increase since May 2023
Months of supply	3.4 months	+0.4 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	41.3%	Up from 40%
Median days on market	43	-1 day
Share of homes sold above list price	25.9%	Up from 25%
Share of homes with a price drop	5.7%	+1.5 pts.
Average sale-to-list price ratio	98.7%	+0.3 pts.

Metro-level highlights: Four weeks ending March 17, 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	San Jose, CA (18.9%) Miami (15.6%) West Palm Beach, FL (15.3%) Newark, NJ (14.6%) Anaheim, CA (14.5%)	San Antonio, TX (-1.5%)	Declined in just 1 metro
Pending sales	San Francisco (18.1%) San Jose, CA (16.4%) Cincinnati (13.7%) Milwaukee (11.8%) Austin, TX (8.8%)	Atlanta (-16.1%) San Antonio, TX (-15.4%) Houston (-13.8%) Miami (-13.6%) Jacksonville, FL (-11.6%)	Increased in 15 metros
New listings	San Jose, CA (40%) Phoenix (31.9%) Sacramento, CA (29.9%) Tampa, FL (28.1%) Miami (27.6%)	Atlanta (-4.6%) Chicago (-0.7%)	Declined in just 2 metros

To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-update-supply-climbs-prices-increase

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/20240321208047/en/

Redfin Journalist Services:

Kenneth Applewhaite, 206-414-8880

press@redfin.com

Source: Redfin

FAQ

What is the ticker symbol for Redfin?

The ticker symbol for Redfin is 'RDFN'.

What is the year-over-year change in the total number of U.S. homes for sale according to the Redfin report?

The total number of U.S. homes for sale has climbed 5% year over year.

What is the year-over-year change in the median U.S. home-sale price?

The median U.S. home-sale price has increased by 5.3% year over year.

What is the outlook for mortgage rates according to Redfin economists?

Redfin economists expect mortgage rates to gradually decline throughout 2024.

What is the percentage change in median sale price in San Jose, CA?

The median sale price in San Jose, CA has increased by 18.9% year over year.