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Redfin Reports Some Would-Be Home Sellers Are Stepping Back as Market Tilts Toward Buyers

1. New listings in U.S. homes rose 6.3% year over year. 2. Pending home sales declined 0.4% year over year in May. 3. Median home-sale price increased 1.2%, mortgage rates near 7%. 4. Typical home sells for 1% less than asking price; buyer competition lower. 5. Sellers need realistic expectations; some potential sellers are backing off.

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FAQ

Why Bearish?

The market is showing declining buyer activity and increased seller hesitation. Historically, similar trends result in price declines or stagnation, as seen in the 2008 housing crisis.

How important is it?

Given the current reluctance among buyers and the decrease in listings, this could reduce Redfin's transaction volumes. The economic environment plays a critical role in shaping real estate dynamics and Redfin's market position.

Why Short Term?

Current economic conditions are likely to affect Redfin's performance in the near term, as buyer activity is softer. Similar patterns in the past suggest that immediate impacts can affect company operations quickly.

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-Many prospective homebuyers are sidelined by near-record costs and economic uncertainty, creating a buyer’s market in many parts of the country. That’s deterring some would-be sellers. SEATTLE--(BUSINESS WIRE)--(NASDAQ: RDFN) — New listings of U.S. homes for sale rose 6.3% year over year during the four weeks ending June 1, one of the smallest increases of the last three months. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. New listings declined year over year in 11 of the 50 most populous U.S. metros, with the biggest drops in San Jose, CA and four Florida metros: Orlando, Fort Lauderdale, Tampa and West Palm Beach. Zooming in on recent weeks, new listings fell during the second half of May. While it’s typical for listings to decline after peaking in mid-May, this year’s drop was the biggest for that time period in a decade. On the buying side, pending home sales declined 0.4% year over year to their lowest May level since 2020, and mortgage-purchase applications fell 3% week over week. Prospective buyers are backing off because housing costs are near record highs, with the median home-sale price up 1.2% year over year and the weekly average mortgage rate approaching 7%, and because the U.S. economy is unpredictable. While there are hundreds of thousands more home sellers than buyers in the market—and new listings are still rising—the recent decline in listings suggests some of this spring’s would-be sellers are backing off. The typical home now sells for about 1% less than its asking price, the biggest discount for this time of year since 2020, and just about 28% of homes sell for above their asking price, down from 32% at this time last year. “If a home is in a desirable neighborhood, especially if it’s fixed up, it will sell fairly quickly,” said Ben Ambroch, a Redfin Premier agent in Milwaukee. “But even that type of home now gets two or three offers, as opposed to the 10 offers it would have gotten a few years ago. Sellers of homes that need work in fringe neighborhoods should be able to find a buyer, but it’s important they come to the table with realistic expectations on price and timing, and a willingness to negotiate. Price within a fair range based on the neighborhood, understand that buyers will be inspecting the home, and be prepared to give concessions.” For Redfin economists’ takes on the housing market, please visit Redfin’s “From Our Economists” page. To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-update-new-listings-lose-steam 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, and title insurance 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. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1.8 billion in commissions. We serve approximately 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. More News From REDFIN

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