Rising Supply Draws in Some Buyers, Even as Housing Payments Soar 10% to All-Time High

Rhea-AI Summary

Redfin reports a surge in new home listings, leading to the highest U.S. monthly housing payment of $2,721, up 10% from the previous year. Mortgage rates near 7% and a 5% increase in median home-sale price contribute to this record high.

Insights

Financial Analyst

The uptick in new housing listings is a noteworthy development for various market participants. From an investor's perspective, this increase could signal a potential shift in the housing market dynamics. Historically, a rise in inventory levels can lead to a cooling of housing prices, as buyers have more options to choose from. This could impact companies in the home construction sector, real estate services and mortgage lending, as their revenues are closely tied to housing market activity.

However, the context of rising mortgage rates and elevated home prices adds layers of complexity. Higher mortgage rates typically dampen demand as they increase the cost of borrowing, which could lead to a slowdown in the housing market. For businesses in the sector, this might translate into tighter margins and a potential reevaluation of growth strategies. It's essential to monitor how these factors will balance out in the coming months—whether increased supply will be absorbed by the market or lead to a price correction.

Economist

The report indicating a surge in housing payments to an all-time high reflects broader economic pressures, such as inflation and interest rate hikes. This environment can be challenging for consumers, as it affects affordability and could suppress home buying activity. For the economy, this could mean a decrease in consumer spending in other areas, as more income is allocated to housing costs.

Moreover, the housing market is a critical component of the economy, often seen as a leading indicator of economic health. A significant change in the housing market, like the one described, could have ripple effects across various sectors. Businesses that rely on a strong housing market, such as those providing home appliances, furniture and home improvement services, may need to adjust expectations if the trend of rising costs continues, potentially dampening consumer appetite for large purchases.

Real Estate Market Analyst

The increase in new listings could be seen as a response to the demand that has outstripped supply in recent years. For real estate companies and brokerages, more listings mean more potential transactions and revenue. However, the impact of the high monthly housing payment must be considered. If the cost of purchasing a home continues to rise, it could lead to a decrease in the pool of potential buyers, which would affect the turnover rate of these new listings.

It's also important to consider regional variations. Some markets may respond differently to these national trends and companies with a local focus could be impacted differently than those with a national reach. The long-term implications will depend on how these factors interact with one another and whether other economic conditions, such as employment rates and wage growth, will support the ability of consumers to afford higher housing costs.

Redfin reports there are more homes for buyers to choose from, with new listings posting their biggest uptick in nearly three years

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) —The typical U.S. monthly housing payment hit an all-time high of $2,721 during the four weeks ending March 24, up 10% from a year earlier, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

Housing payments are at a record high because of the one-two punch of elevated mortgage rates and rising home prices. Mortgage rates remain elevated near 7%, and the median home-sale price is up 5% year over year to roughly $375,000, just about $9,000 shy of June 2023’s record high.

Many sellers are trying to take advantage of rising prices by listing their home. New listings are up 15%, the biggest increase in nearly three years, and the total number of homes for sale is up 6%, the biggest increase in nearly one year.

Increased supply is bringing back some demand, which is the main reason price growth remains robust. Mortgage-purchase applications are up 14% from a month ago, and pending home sales are just 1% lower than they were a year ago, the smallest decline since the beginning of the year.

“High mortgage rates aren’t deterring buyers as much as they were last year; a lot of people want to get in now before prices go up more,” said Miami Redfin agent Rachel Riva. “All of my recent listings have gone under contract in under 10 days, and most of them have received multiple offers. Buyers are lessening the impact of elevated rates in a few ways: Some are making high down payments to lower their monthly payments, and some are willing to take on a high rate now in hopes of refinancing when and if rates come down.”

There are a few signs that price growth could soften a bit in the coming months. Nearly 6% of home sellers dropped their asking price this week, on average, the highest share of any March on record. Months of supply hit its highest level of any March since 2020–when the onset of the pandemic ground the housing market to a halt–indicating that the market is becoming more balanced.

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	6.91% (March 27)	Down from 7.11% a week earlier	Up from 6.44%	Mortgage News Daily
Weekly average 30-year fixed mortgage rate	6.87% (week ending March 21)	Up from 6.74% a week earlier	Up from 6.42%	Freddie Mac
Mortgage-purchase applications (seasonally adjusted)		Essentially unchanged from a week earlier; up 14% from a month earlier (as of week ending March 22)	Down 16%	Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)		Up 2% from a month earlier (as of week ending March 24)	Down 8%	Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents
Google searches for “home for sale”		Up 6% from a month earlier (as of March 25)	Down 5%	Google Trends
Touring activity		Up 28% from the start of the year (as of March 25)	At this time last year, it was up 21% from the start of 2023	ShowingTime, a home touring technology company

Key housing-market data

U.S. highlights: Four weeks ending March 24, 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 24, 2024	Year-over-year change	Notes
Median sale price	$374,500	4.6%
Median asking price	$405,451	5.1%
Median monthly mortgage payment	$2,721 at a 6.87% mortgage rate	9.8%	Record high
Pending sales	85,048	-1.1%	Smallest decline in over 2 months
New listings	92,087	14.8%	Biggest increase since June 2021
Active listings	807,227	6.3%	Biggest increase since May 2023
Months of supply	3.3 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	42.3%	Essentially unchanged
Median days on market	40	-2 days
Share of homes sold above list price	26.8%	Up from 26%
Share of homes with a price drop	5.8%	+1.6 pts.
Average sale-to-list price ratio	98.8%	+0.2 pts.

Metro-level highlights: Four weeks ending March 24, 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	West Palm B each, FL (20.7%) San Jose, CA (17.6%) Miami (16.1%) Detroit (15%) New Brunswick, NJ (14.5%)	San Antonio, TX (-0.3%)	Declined in just 1 metro
Pending sales	San Jose, CA (25.1%) San Francisco (20.1%) Cincinnati (11.6%) Anaheim, CA (9.9%) Seattle (8.2%)	Atlanta (-15.4%) Houston (-13%) San Antonio, TX (-12.7%) West Palm Beach, FL (-12.5%) Miami (-10.7%)	Increased in roughly half of the metros
New listings	San Jose, CA (41.8%) Sacramento, CA (38%) Phoenix (31.7%) Las Vegas (27.3%) Austin, TX (26%)	Atlanta (-6.6%) Chicago (-2.9%)	Declined in just 2 metros

To view the full report, including charts, please visit:

https://www.redfin.com/news/housing-market-update-housing-costs-inventory-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/20240328774631/en/

Redfin Journalist Services:

Kenneth Applewhaite, 206-414-8880

press@redfin.com

Source: Redfin

FAQ

What is the current U.S. monthly housing payment according to Redfin?

The typical U.S. monthly housing payment hit an all-time high of $2,721.

How much has the U.S. monthly housing payment increased compared to the previous year?

The housing payment has increased by 10% from the previous year.

What factors have contributed to the record high housing payments?

Elevated mortgage rates near 7% and a 5% increase in median home-sale price have contributed to the record high housing payments.