Redfin Corp Stock Price, News & Analysis

Redfin reports a significant surge in second home purchases with high climate risks. In 2020-2021, purchases with high flood risk increased by 45%, while those with high storm and heat risks rose by 40% and 39%, respectively. Overall, second home purchases jumped by 37% compared to the previous two years. Despite growing awareness of climate risks, many buyers continue to overlook these concerns, prioritizing location benefits over potential dangers. The report highlights the most common risks facing second homeowners, with high heat risk affecting 94% of recent purchases.

Redfin reports a shift in the housing market as a record-high number of home sellers are reducing prices due to a spike in mortgage rates. The median asking price for newly listed homes fell by 1.5% from recent peaks, while pending sales saw their largest drop since May 2020. Despite declining buyer activity, data suggests early-stage demand is stabilizing. The current mortgage rate is 5.7%, and the median home sale price has risen 14% year over year to $399,249, reflecting ongoing affordability challenges.

Redfin's survey reveals significant influences on homebuyers due to changing state abortion laws after the Supreme Court's decision to overturn Roe v. Wade. 15% of recent movers refuse to live where abortion is fully legal, while 12% prefer exclusively such areas. 40% hold a favorable view of residing in states with legal abortion, contrasting with 32% against it. The survey, conducted in August 2021 with 1,023 participants, suggests that legality may increasingly impact housing choices, especially in regions like Texas, currently attracting many from California.

Redfin reports a significant drop in vacation home demand, which has now fallen below pre-pandemic levels for the first time in two years. Mortgage-rate locks for second homes decreased by 4% from pre-pandemic levels in May, a decline driven by high home prices, rising mortgage rates nearing 6%, and new federal loan fees. These factors have created a challenging environment for potential second-home buyers, with monthly payments skyrocketing. This shift marks a drastic change from the peak demand experienced in March 2021.

Redfin's latest report indicates a significant decline in homebuyer demand as mortgage rates soar to 5.81%, the highest since 2008. The Redfin Homebuyer Demand Index fell by 16% year-over-year, marking the largest drop since April 2020. Home sales and pending sales also dropped 10%, the steepest decline since May 2020. Despite these challenges, the median home sale price reached a record $399,998, indicating a persistent affordability crisis. A record share of sellers are reducing prices, reflecting changing market dynamics.

Redfin reports an increase in price drops for homes across the U.S., particularly in Utah and other Western metro areas. In May, nearly 50% of homes in Provo and Tacoma saw price reductions. Buyers are retreating due to rising mortgage rates and high inflation, leading sellers to adjust expectations. The national share of price drops reached a record high, indicating a cooling housing market. Prices surged during the pandemic, but migration trends are reversing, with many newcomers now leaving.

A new report from Redfin reveals that homebuyers with a $2,500 monthly budget have lost nearly $120,000 in purchasing power due to rising mortgage rates, now around 6%. This budget now allows for the purchase of a $399,750 home compared to $517,500 at the end of last year when rates were at 3%. Currently, 45.6% of homes are affordable with this budget at the new rate, a drop from 61.6% if rates remained at 3%. The rise in rates is cooling the housing market and may hinder seller activity as many prefer to keep their lower rates.

Redfin reported a 3% month-over-month decline in home sales for May, marking the second drop on record outside 2020. Home prices increased by just 1.5%, the smallest May rise since 2012, with median sale prices at $430,600. Mortgage rates reached 5.23%, their highest since 2009, contributing to a tight housing market and decreased inventory. Despite an overall 10.2% decline in year-over-year home sales, existing homeowners hold record high equity. The market is expected to slow further into fall as buyers face reduced competition.

Redfin reports a significant drop in homebuyer competition in May 2022, with only 57.8% of offers facing competition, the lowest since February 2021. This marks a decline from 60.9% in April and 68.8% in May 2021. The typical monthly mortgage payment has surged to $2,514, up 49% year over year, as mortgage rates rise to 5.78%. Redfin anticipates that competition will fall below 50% by year-end. Notably, Providence, Riverside, and Raleigh saw the largest declines in bidding wars.