Redfin Corp Stock Price, News & Analysis

Redfin (RDFN) reports that 17.2% of U.S. homeowners with mortgages now have an interest rate of 6% or higher, marking the highest percentage since 2016. This represents a significant increase from 12.3% in Q3 2023. The analysis shows that 82.8% of mortgaged homeowners still have rates below 6%, with specific breakdowns showing 73.3% below 5%, 55.2% below 4%, and 21.3% below 3%.

The 'lock-in effect,' where homeowners resist selling due to having lower mortgage rates than current market rates, is gradually easing. This shift is attributed to people accepting that rates won't return to pandemic lows, increased home equity enabling moves despite higher rates, and life events necessitating relocations. As a result, both new listings and active listings are higher than the previous year, though some of this increase is due to properties remaining on the market longer.

Redfin (NASDAQ: RDFN) reports a significant 7.9% year-over-year increase in new U.S. home listings during the four weeks ending February 2, marking the largest increase since late last year. However, pending sales declined 8.1% year-over-year, with homebuyer demand remaining near its lowest level since last spring.

The market currently shows 5 months of supply, up from 4.4 months a year earlier, representing the highest level in six years. This increased inventory has led to homes typically selling for 2% below list price, the largest discount in nearly two years. The median monthly housing payment has risen to $2,784, up 8.3% year-over-year, despite mortgage rates dropping below 7% for the first time since mid-December.

Regionally, Pittsburgh led with the highest year-over-year median sale price increase (15.7%), while Austin saw the largest decrease (-5.5%). New listings surged most significantly in Orlando (27.7%), while Detroit experienced the largest decline (-13.9%).

Redfin (NASDAQ: RDFN) reports significant disparities in housing affordability based on marital status. Nearly 70% of single, divorced, or separated individuals struggle with housing payments, compared to 52% of married people. The gap is primarily due to single-income households versus dual-income advantages.

Income disparities are stark: 63% of single and 69% of divorced respondents earn under $50,000 annually, versus 26% of married respondents. Conversely, 29% of married couples earn over $100,000, compared to only 7% of singles and 6% of divorced individuals.

The financial burden is particularly evident in major cities. In Washington D.C., single residents pay an additional $11,448 annually compared to those sharing housing costs. In Los Angeles, this difference reaches $14,880 yearly. Among those struggling, 27% of divorced and 21% of single individuals report skipping meals to afford housing, compared to 14% of married people.

Redfin's Q4 2023 report shows buyer's agent commissions averaged 2.37%, virtually unchanged from Q3's 2.36% when new NAR rules took effect, but down from 2.45% year-over-year. The analysis reveals diverging trends across price segments: commissions for homes over $1 million decreased to 2.17% (from 2.33% YoY), while those for homes under $500,000 rose to 2.46% (from 2.42% in Q3).

A Redfin-commissioned survey of 500 real estate agents found that 48% report stable commissions since the NAR settlement, while 43% noted decreases. Notably, 54% of agents reported increased commission negotiations with clients. Looking ahead, 75% of agents express concern about declining commissions over the next five years, with 51% expecting decreases in the next 12 months.

Redfin (NASDAQ: RDFN) reports that homes are selling at their slowest pace since the pandemic began, with properties taking 54 days to sell, up from 35 days in 2022. The market shows 5.2 months of supply, the highest since February 2019, indicating a buyer's market.

Pending home sales declined 9.4% year over year, the largest drop since September 2023. This slowdown is attributed to high housing costs, with mortgage rates near 7% and home prices up 4.8% year over year. The median monthly housing payment stands at $2,753, close to April's record high.

While extreme weather conditions are affecting buyer activity, the market may improve as mortgage rates slightly decrease from early January peaks and new listings increase by 2.2%. The median sale price reached $377,125, with active listings up 11.3% year over year.

Downtown Seattle's apartment rents increased for the first time in 17 months, rising 2.5% year over year to $2,000 in December, according to Redfin. This uptick precedes Amazon's January policy requiring staff to work in-office five days a week.

Seattle's rental market has seen significant fluctuations: median asking rent peaked at nearly $2,500 pre-pandemic, dropped to $1,399 in February 2021, surged to $3,118 in August 2022, and then declined 36% due to increased apartment construction. Among Seattle's inner neighborhoods, Capitol Hill saw the highest increase (+7.2% to $1,825), while Queen Anne and South Lake Union experienced declines exceeding 13%.

The overall Seattle metro area saw a modest 0.5% increase to $2,017. On the east side, downtown Redmond rents rose 4.3% to $2,350, while downtown Bellevue decreased 3% to $2,579.

Redfin (NASDAQ: RDFN) reports that U.S. housing market activity is experiencing significant headwinds, with the median monthly housing payment reaching $2,686 - the highest in nearly seven months. This surge is attributed to rising mortgage rates (7.04%) and a 5% year-over-year increase in median home sale prices ($378,144).

The market shows signs of slowdown with pending home sales down 10.1% annually, marking the largest decline in over a year. Homes are taking longer to sell, averaging 52 days on market - the longest span in two years. Contributing factors include extreme weather conditions, wildfires in Southern California, and new listings.

In Los Angeles, the recent wildfires have destroyed or damaged 17% of homes within the Palisades and Eaton fires perimeters, leading to a surge in rental searches. Online views of rental listings in Los Angeles County have nearly doubled year-over-year, while pending home sales declined by approximately 10%.

Redfin reports that renters now need to earn $63,680 to afford the median asking rent for a U.S. apartment, the lowest amount since March 2022. This represents a 0.4% decrease from last year and a 6.4% drop from August 2022, when the median asking rent was at an all-time high of $1,700.

Renters are earning more, with the median income for 2024 estimated at $54,752, up 5.3% from 2023 and 35.2% from 2019. The gap between renters' earnings and the income needed for rent affordability is narrowing, with the smallest difference in five years.

Austin, TX, is the most affordable metro for renters, with a median salary 25.1% higher than needed to afford the typical apartment. Providence, RI, is the least affordable, with renters earning 41.3% less than required. Rental affordability improved the most in Austin in 2024, where the required income to afford the typical apartment fell by 16.3% from the previous year.

Conversely, rental affordability worsened the most in Providence, RI, with a 12.6% increase in the income needed to afford the median rent. Other metros with significant year-over-year affordability declines include Virginia Beach, VA, Louisville, KY, and Baltimore, MD.

Redfin (NASDAQ: RDFN) reports U.S. home prices increased 0.4% month-over-month in December 2024, following November's 0.5% growth. The year-over-year price growth of 5.4% marked the smallest annual increase since 2015 and second smallest since 2013, according to the Redfin Home Price Index (RHPI).

Among the 50 most populous U.S. metro areas, 15 (30%) experienced price declines in December. The largest drops were in Tampa (-1.3%), Atlanta (-0.9%), and Miami (-0.7%). Conversely, the highest gains were in Pittsburgh (1.9%), Cleveland (1.5%), and St. Louis (1.3%).

Redfin Senior Economist Sheharyar Bokhari predicts steady price growth throughout 2025, citing insufficient inventory to meet buyer demand despite expected increases in sales due to pent-up demand.