Redfin Corp Stock Price, News & Analysis

Home sales have surpassed pre-pandemic levels for the first time, with a 2% increase compared to January-February, as reported by Redfin. Despite rising COVID-19 cases, demand is driven by historically low mortgage rates, with the average 30-year fixed rate at 3.03%. Key indicators show a 10% rise in pending sales and a Redfin home-buying demand index 20% above pre-pandemic levels. However, new listings are insufficient, leading to a 29% decrease in homes for sale year-over-year, resulting in increased competition and rising home prices, with average sales up 7% to $310,000.

In June 2020, over 53.7% of Redfin offers faced bidding wars, marking an increase from 51.8% in May and 44.4% in April. The surge in bidding wars is attributed to low mortgage rates at 3.03% and a significant drop in home inventory, down 21.3% year-over-year. Notably, single-family homes had the highest competition rates at 56.2%. Boston recorded the most intense bidding wars, with 72.4% of offers encountering competition. The report underscores a competitive market despite economic uncertainties due to COVID-19.

The housing market in June showed signs of instability as pending sales fell by 8.2% year-over-year, contrasting a previous increase. After seasonal adjustments, the decline was 3%. New home listings decreased by 8.3% from last year, with active listings down 27%. Despite this, homes for sale are moving quickly, with 47% selling within two weeks. The median list price reached $330,000, up 12% from 2019. Mortgage rates hit a record low of 3.07%, but purchase applications fell by 2%. The outlook remains uncertain due to rising COVID-19 cases, particularly affecting sales in certain markets.

On July 6, 2020, Redfin reported that 15.9% of Black Americans applying for mortgages experience rejection, compared to 7% for white Americans. The widest disparities occur in cities like Milwaukee and San Francisco, where Black applicants face over a 10-point higher denial rate. While overall mortgage rejection rates have halved since the 2008 financial crisis, Black applicants frequently encounter barriers due to debt and credit histories. Efforts to close this gap include increased financial education and diversification in the lending industry.

The median sale price for luxury homes in the U.S. dropped by 2.3% year-over-year to $1,099,521 during the 12 weeks ending June 14, marking one of the largest declines since 2015. However, data indicates a potential rebound, with a 3.5% increase for luxury homes in the top 5% over the week ending June 14. The pandemic significantly impacts luxury sales, which saw a 29.9% year-over-year decline. Meanwhile, non-luxury home prices rose by 4.1%.

Pending home sales for the week ending June 21 decreased by 3% year-over-year, nearing 2019 levels, according to Redfin's latest market report. Homebuying demand surged 30% above pre-pandemic levels, driven by mortgage rates dropping to historic lows below 3%. Completed home sales fell 12%, but are expected to recover later in the summer. A lack of housing supply hinders sales growth, with new listings down 9%. Price growth for newly listed homes rose 10%, leading to increased competition with 52% of offers facing bidding wars.

As of Q1 2020, homeownership among Black families stands at 44%, up from 41.1% in Q1 2019, while the rate for white families has slightly increased to 73.7%. Minneapolis has the lowest Black homeownership rate at 25%, followed by Milwaukee and Salt Lake City. The report highlights a persistent gap in homeownership rates influenced by systemic racism, discriminatory policies, and economic challenges. Notably, the Black homeownership rate has declined in most metros since 2012, necessitating efforts for systemic change in the housing market.

During the 12 weeks ending May 31, home prices in the most affordable third of the U.S. increased by 5.5% year over year, while the most expensive third saw a mere 2% rise. This growth trend is tied to a shortage of affordable homes on the market, with an average of 322,000 homes available in the bottom tier. The gap between the price growth rates of the two segments has widened to 3.5 percentage points.

Additionally, with historically low mortgage rates, many first-time buyers are opting for affordable homes, leading to increased competition and further price hikes.

Redfin reports a record 27.0% of home searchers looking to relocate to different metro areas during April and May 2020, up from 25.2% in Q2 2019. This migration surge, influenced by the pandemic, sees many users leaving expensive coastal cities like New York, San Francisco, and Los Angeles for more affordable options. Notably, home searches in small towns increased by 87% year-over-year. The report highlights a trend toward suburban living and smaller towns as remote work becomes more common, but the long-term effects of these changes remain uncertain.