Redfin Corp Stock Price, News & Analysis

Redfin (NASDAQ: RDFN) reports that if mortgage rates rise to 3.9%, a buyer with a $2,000 monthly budget could afford a $382,250 home, down from $396,000 at a 3.5% rate. The increase in rates is anticipated as the Federal Reserve raises interest rates to combat inflation, with an expected rise starting in March. Despite this, buyer demand remains high, with pending sales up 38% year-over-year. Popular areas like Austin and Atlanta may see significant drops in affordable homes.

Redfin Corporation (NASDAQ: RDFN) is set to release its fourth-quarter and full-year 2021 results on February 17, 2022, after market close. A live webcast to discuss these results will be held at 1:30 p.m. PT / 4:30 p.m. ET. The event can be accessed on their Investor Relations website. Redfin is a technology-driven real estate company offering various services including brokerage, iBuying, rentals, lending, and renovations. Since its inception in 2006, it has saved customers over $1 billion in commissions across more than 100 markets in the U.S. and Canada.

In January, home prices surged 14% year-over-year, reaching a median of $354,750, as buyers rushed to secure homes before mortgage rates increase. The supply has plummeted to record lows, with active listings falling 29% to an all-time low of 438,000. Despite a 2% decline in pending sales from last year, demand remains strong with over half of homes selling within two weeks. The estimated monthly mortgage payment hit a record high of $1,877. Economists predict a slowing price increase to 7% by year-end, influenced by rising mortgage rates and limited inventory.

Redfin reported a 19% annual surge in the total value of U.S. homes to $39 trillion by December 2021, marking the largest annual increase since 2001. Factors driving this boom include low mortgage rates, remote work, and a housing shortage. The housing market has experienced double-digit price gains for 17 consecutive months, with demand high in migration hotspots like Austin and Phoenix. Notably, single-family homes surged in value by 19.6%, reflecting a trend towards larger living spaces.

The latest report from Redfin (RDFN) indicates that the average commission rate for buyer’s agents has dropped to 2.63%, marking a four-year low. This decrease is attributed to a competitive housing market where homeowners can attract buyers without offering higher commissions. Despite this, buyer’s agents are earning more in dollar terms, averaging $12,415 per transaction due to rising home prices, with the median home price reaching $383,100. The report highlights a shift towards lower commission rates as sellers leverage the strong demand for homes.

Redfin reports that the share of newly built single-family homes in the U.S. reached a record high of 34.1% in December, up from 25.4% last year. The increase reflects builders' efforts to meet surging demand due to low mortgage rates and inventory shortages. Existing home inventory dropped 14.2% year-over-year, while new home inventory rose 34.8%. Median sale prices for new homes were $377,700, experiencing a 9.2% month-over-month decline but a 3.4% increase year-over-year. Building permits also rose 6.5% year-over-year, signaling continued supply growth.

The latest report from Redfin reveals a correlation between high migration rates and inflation in popular U.S. destinations. Atlanta topped the list with an 8.9% inflation rate, followed by Phoenix at 8.4%, and Tampa at 8%. In contrast, cities like San Francisco and New York, from which many are relocating, reported lower inflation rates of 4% and 4.6%, respectively. Rapidly rising home prices, with Atlanta witnessing a 22.8% increase year over year, are significantly contributing to inflation. As more people migrate to affordable locations, the financial benefits of relocation may decrease due to rising costs.