Redfin reports there are more homes for buyers to choose from, with new listings posting their biggest uptick in nearly three years

Seattle, WA – March 28, 2024 (BUSINESS WIRE) (NASDAQ: RDFN) The typical U.S. monthly housing payment hit an all-time high of $2,721 during the four weeks ending March 24, up 10% from a year earlier, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

Housing payments are at a record high because of the one-two punch of elevated mortgage rates and rising home prices. Mortgage rates remain elevated near 7%, and the median home-sale price is up 5% year over year to roughly $375,000, just about $9,000 shy of June 2023’s record high.

Many sellers are trying to take advantage of rising prices by listing their home. New listings are up 15%, the biggest increase in nearly three years, and the total number of homes for sale is up 6%, the biggest increase in nearly one year.

Increased supply is bringing back some demand, which is the main reason price growth remains robust. Mortgage-purchase applications are up 14% from a month ago, and pending home sales are just 1% lower than they were a year ago, the smallest decline since the beginning of the year.

“High mortgage rates aren’t deterring buyers as much as they were last year; a lot of people want to get in now before prices go up more,” said Miami Redfin agent Rachel Riva. “All of my recent listings have gone under contract in under 10 days, and most of them have received multiple offers. Buyers are lessening the impact of elevated rates in a few ways: Some are making high down payments to lower their monthly payments, and some are willing to take on a high rate now in hopes of refinancing when and if rates come down.”

There are a few signs that price growth could soften a bit in the coming months. Nearly 6% of home sellers dropped their asking price this week, on average, the highest share of any March on record. Months of supply hit its highest level of any March since 2020–when the onset of the pandemic ground the housing market to a halt–indicating that the market is becoming more balanced.

Leading indicators

Indicators of homebuying demand and activity
	Value (if applicable)	Recent change	Year-over-year change	Source
Daily average 30-year fixed mortgage rate	6.91% (March 27)	Down from 7.11% a week earlier	Up from 6.44%	Mortgage News Daily
Weekly average 30-year fixed mortgage rate	6.87% (week ending March 21)	Up from 6.74% a week earlier	Up from 6.42%	Freddie Mac
Mortgage-purchase applications (seasonally adjusted)		Essentially unchanged from a week earlier; up 14% from a month earlier (as of week ending March 22)	Down 16%	Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)		Up 2% from a month earlier (as of week ending March 24)	Down 8%	Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents
Google searches for “home for sale”		Up 6% from a month earlier (as of March 25)	Down 5%	Google Trends
Touring activity		Up 28% from the start of the year (as of March 25)	At this time last year, it was up 21% from the start of 2023	ShowingTime, a home touring technology company

Key housing-market data

U.S. highlights: Four weeks ending March 24, 2024Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.
	Four weeks ending March 24, 2024	Year-over-year change	Notes
Median sale price	$374,500	4.6%
Median asking price	$405,451	5.1%
Median monthly mortgage payment	$2,721 at a 6.87% mortgage rate	9.8%	Record high
Pending sales	85,048	-1.1%	Smallest decline in over 2 months
New listings	92,087	14.8%	Biggest increase since June 2021
Active listings	807,227	6.3%	Biggest increase since May 2023
Months of supply	3.3 months	+0.4 pts.	4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions
Share of homes off market in two weeks	42.3%	Essentially unchanged
Median days on market	40	-2 days
Share of homes sold above list price	26.8%	Up from 26%
Share of homes with a price drop	5.8%	+1.6 pts.
Average sale-to-list price ratio	98.8%	+0.2 pts.

Metro-level highlights: Four weeks ending March 24, 2024Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy.
	Metros with biggest year-over-year increases	Metros with biggest year-over-year decreases	Notes
Median sale price	West Palm Beach, FL (20.7%)San Jose, CA (17.6%)Miami (16.1%)Detroit (15%)New Brunswick, NJ (14.5%)	San Antonio, TX (-0.3%)	Declined in just 1 metro
Pending sales	San Jose, CA (25.1%)San Francisco (20.1%)Cincinnati (11.6%)Anaheim, CA (9.9%)Seattle (8.2%)	Atlanta (-15.4%)Houston (-13%)San Antonio, TX (-12.7%)West Palm Beach, FL (-12.5%)Miami (-10.7%)	Increased in roughly half of the metros
New listings	San Jose, CA (41.8%)Sacramento, CA (38%)Phoenix (31.7%)Las Vegas (27.3%)Austin, TX (26%)	Atlanta (-6.6%)Chicago (-2.9%)	Declined in just 2 metros

To view the full report, including charts, please visit:

Housing Market Update: Rising Supply Draws in Some Buyers, Even as Housing Payments Soar 10% to All-Time High

See more

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, title insurance, and renovations 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. Customers selling a home can have our renovations crew fix it up to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we’ve saved customers more than $1.6 billion in commissions. We serve more than 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.

Contacts

Redfin Journalist Services:
Kenneth Applewhaite, 206-414-8880
press@redfin.com

Redfin reports over one-third of home purchases in February were made in all cash—not far from the record high

Seattle, WA – March 29, 2024 (BUSINESS WIRE) (NASDAQ: RDFN) The median down payment for U.S. homebuyers was $55,640 in February, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That’s up 24.1% from $44,850 a year earlier—the largest annual increase in percentage terms since April 2022.

The typical homebuyer’s down payment last month was equal to 15% of the purchase price, up from 10% a year earlier.

This is based on a Redfin analysis of county records across 40 of the most populous U.S. metropolitan areas going back through 2011.

“Homebuyers are doing whatever they can to pull together a large down payment in order to lower their monthly payments moving forward,” said Rachel Riva, a Redfin real estate agent in Miami. “The smallest down payment I’ve seen recently is 25%. I had one client who put down 40%.”

Home prices rose 6.6% year over year in February, which is part of the reason down payments increased; a higher home price naturally leads to a higher down payment because the down payment is a percentage of the home price. But elevated housing costs (from both high prices and high mortgage rates) are also incentivizing buyers to take out larger down payments.

A bigger down payment means a smaller total loan amount, and a smaller loan amount means smaller monthly interest payments. For example, a buyer who purchases today’s median-priced U.S. home ($374,500) and puts 15% down would have a monthly payment of $2,836 at the current 6.79% mortgage rate. A buyer who puts 10% down on that same home with that same rate would have a monthly payment of $2,968. That’s $132 more per month, which adds up over the course of a mortgage. Mortgage rates are down from their October peak of roughly 8%, but are still more than double the all-time low hit during the pandemic.

Over 1 in 3 Home Purchases Are Made With Cash—a Near Record Share

Over one-third (34.5%) of U.S. home purchases in February were made with all cash, up from 33.4% a year earlier. That’s just shy of the 34.8% decade-high hit in November, and isn’t far below the record high of 38% hit in 2013.

Redfin defines an all-cash purchase as a home purchase with no mortgage loan information on the deed.

Some homebuyers are paying in cash for the same reason others are taking out large down payments: elevated mortgage interest rates. While a large down payment helps ease the sting of high rates by reducing monthly interest payments, an all-cash purchase removes the sting altogether because it means a buyer isn’t paying interest at all.

Most buyers, though, can’t afford to pay in cash, and many can’t afford a big down payment either. First-time buyers, especially, are at a disadvantage in today’s market. That’s because they don’t have equity from the sale of a previous home to bolster their down payments, and are often competing against all-cash offers, which sellers tend to favor. Many all-cash offers come from investors, who were buying up more than one-quarter of the country’s low-priced homes as of the end of last year. Overall, though, investors are purchasing far fewer homes than they were during the pandemic housing boom.

“High mortgage rates are widening the wealth gap between people of different races, generations and income levels,” said Redfin Economics Research Lead Chen Zhao. “They’ve added fuel to the fire lit by surging home prices during the pandemic, creating a reality where in many places, wealthy Americans are the only ones who can afford to buy homes. Meanwhile, people who are priced out of homeownership are missing out on a major wealth building opportunity, which could have financial implications for their children and even their children’s children.”

FHA Loans More Popular Than They Were During Pandemic Because the Market Is Less Competitive

Roughly one in six (15.5%) mortgaged U.S. home sales used an FHA loan in February, up from 14.9% a year earlier and just shy of the 16.3% four-year high hit a month earlier. FHA loans are more common than they were during the pandemic homebuying boom (they represented 12.1% of mortgaged sales in February 2022) because the market today is less competitive.

Roughly one in 14 (7%) mortgaged home sales used a VA loan in February, down from 8% a year earlier. The share of home sales using a VA loan typically doesn’t change much over time, though it fluctuated more than usual during the topsy-turvy pandemic market.

Conventional loans are the most common type, representing over three-quarters (77.5%) of mortgaged home sales in February, up slightly from 77.1% a year earlier. Jumbo loans—used for higher loan amounts and popular among luxury buyers—represented 5.3% of mortgaged sales, compared with 4.7% a year earlier.

Metros with biggest increases/decreases in down payment amounts

In Las Vegas, the median down payment jumped 60.9% year over year—the largest increase among the metros Redfin analyzed. Next came San Diego (49.8%), Charlotte, NC (47.4%), Virginia Beach, VA (45%) and Newark, NJ (32.2%). Down payments only fell in two metros: Milwaukee (-13.9%) and Pittsburgh (-0.4%).

Metros with highest/lowest down payment percentages

In San Francisco, the median down payment was equal to 25% of the purchase price—the highest among the metros Redfin analyzed. It was followed by San Jose, CA (24.9%) and Anaheim, CA (21.9%). The following metros all had median down payments of 20%: Fort Lauderdale, FL, Los Angeles, Miami, Montgomery County, PA, New Brunswick, NJ, New York, Oakland, CA, Sacramento, CA, San Diego, Seattle and West Palm Beach, FL.

Down payment percentages were lowest in Virginia Beach (1.8%), Detroit (5%), Pittsburgh (5%), Baltimore (5%) and Philadelphia (7.3%).

While the Bay Area has among the most expensive home prices, it also has a high concentration of wealthy residents, many of whom can afford large down payments. Meanwhile, Virginia Beach is at the bottom of the list because it has a high concentration of veterans, many of whom take out VA loans, which require little to no down payment.

Metros where all-cash purchases are most/least common

In Jacksonville, FL, 54.4% of home purchases were made in cash—the highest share among the metros Redfin analyzed. Next came West Palm Beach (53.4%), Cleveland (48.8%), Fort Lauderdale (46.2%) and Atlanta (46.1%). These metros are popular among investors, who often pay in cash.

All-cash purchases were least common in San Jose (18%), Oakland (21.6%), San Diego (21.7%), Los Angeles (23%) and Providence, RI (23.3%).

Metros with biggest increases/decreases in share of all-cash purchases

In Atlanta, 46.1% of home purchases were made in cash, up 12.5 percentage points from a year earlier—the largest increase among the metros Redfin analyzed. It was followed by Jacksonville (8 ppts), Oakland (6.2 ppts), Portland, OR (5.7 ppts) and New Brunswick (5.2 ppts).

In Columbus, OH, 28.5% of home purchases were made in cash, down 6.1 percentage points from a year earlier—the largest decrease among the metros Redfin analyzed. Next came Cincinnati (-4.4 ppts), Philadelphia (-3.3 ppts), Chicago (-3.3 ppts) and Phoenix (-2.8 ppts).

To view the full report, including charts and metro-level data, please visit:
https://www.redfin.com/news/all-cash-homebuyers-february-2024

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, title insurance, and renovations 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. Customers selling a home can have our renovations crew fix it up to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we’ve saved customers more than $1.6 billion in commissions. We serve more than 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.

Contacts

Redfin Journalist Services:
Ally Braun, 206-588-6863
press@redfin.com

Buyers must earn nearly twice as much as before the pandemic to afford the typical starter home, due to the one-two punch of high prices and mortgage rates. One sliver of hope: Affordability of starter homes is slowly improving after hitting a low point at the end of 2023.

Seattle, WA – March 28, 2024 (BUSINESS WIRE) (NASDAQ: RDFN) Homebuyers must earn $75,849 annually to afford the typical U.S. starter home as of February, up 8.2% ($5,767) from a year earlier, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. The monthly housing payment for the typical U.S. starter home was $1,896 in February, also up 8.2% from a year earlier.

The income necessary to buy starter homes is increasing from a year ago due to rising prices and mortgage rates: The typical starter home sold for $240,000 in February, up 3.4% year over year, and the average 30-year fixed mortgage rate was 6.78%, up from 6.26% a year earlier.

Starter homes are roughly half as affordable as they were before the pandemic. Americans needed to earn $40,465 annually to afford the typical U.S. starter home in February 2020, when the median sale price was $169,000 and the average mortgage rate was about 3.5%.

Americans earning the median U.S. income can still afford the typical starter home

Incomes are rising, but at less than half the rate of starter-home costs. The typical American household earns an estimated $84,072, up 5.5% from February 2023 (versus the 8.2% increase in income needed to buy a starter home). That means the typical household can afford the $75,849 median-priced starter home, but they have less money left over after housing payments than they used to.

Today, the median household income is just 11% higher than the income needed to buy a starter home. One year ago, the median household income was 14% higher than the income required to buy a starter home, and four years ago, just before the pandemic began, the median income was 63% higher.

Zooming out from starter homes to the overall market, a separate Redfin report found that a homebuyer must earn $114,000 to afford the typical U.S. home, roughly $30,000 more than the median U.S. household income.

It’s increasingly hard for lower-income families to buy a starter home

In the past, it was often true that people earning less than the median income could afford starter homes in much of the country; starter homes were considered an affordable option for first-time buyers.

Today, someone earning 80% of the median income—$67,258—could not afford the typical U.S. starter home. Before the pandemic real estate boom, someone earning 80% of the median income—roughly $53,000 in early 2020—could afford the typical starter home, which required an annual income of just over $40,000.

“The pandemic housing-market boom changed the definition of a starter home,” said Redfin Senior Economist Elijah de la Campa. “A decade ago, many people thought of a starter home as a small three-bedroom single-family house. Now that type of home could cost seven figures, especially in expensive parts of the country. The most affordable homes are much smaller and often require a lot of work to make them habitable—which makes them cost even more. Today’s most affordable homes are still hard for the average American to afford, let alone the average first-time buyer who tends to put less money down in exchange for higher monthly payments. Rising prices and mortgage rates are pushing buyers who earn more than the median income to buy starter homes, and often pushing buyers who earn less money out of the market.”

Another challenge for first-time buyers: They’re often competing with all-cash offers for limited inventory of starter homes. More than one-third (36.5%) of the nation’s starter homes were purchased in cash in February, near the highest level in a decade. It’s likely that many of those homes sold to real estate investors, who are turning them into rentals and thus removing them from the stock of for-sale starter homes. Others likely sold to repeat homebuyers using equity from a previous sale.

Starter homes are more affordable than they were last fall

While the income required to buy a starter home is up from a year ago, it’s down 8% ($6,524) from last October’s all-time high of $82,373. That’s because mortgage rates have come down from their recent high. Mortgage rates are sitting around 6.8%, down from a two-decade high of 7.8% in October 2023. Affordability should continue improving throughout 2024 as mortgage rates gradually decline further.

There are also a few other encouraging signs for first-time buyers:

• There are more starter homes to choose from. Active listings of starter homes rose 7% annually in February, the biggest increase in at least a decade. (The caveat is that the number of starter homes on the market fell to a record low in February 2023, which is part of the reason for the big year-over-year uptick.)
• In some metros, first-time buyers are able to negotiate prices down or get concessions from sellers because high costs are pushing down homebuying demand.

Metro-level* highlights: Starter homes, February 2024

*For the 50 most populous U.S. metros

• The income needed to afford a starter home is highest in California. A homebuyer needs to earn roughly $319,000 to buy the median-priced starter home in San Jose, $306,000 in San Francisco, and $247,000 in Anaheim.
• It’s lowest in the Rust Belt: Detroit ($22,000), Pittsburgh ($32,000) and St. Louis, MO ($37,000).
• The income needed to afford a starter home declined in just 1 metro area: Pittsburgh (-0.8% year over year to $32,000).
• It increased most in New Brunswick, NJ (17.5% to $126,000), Miami (16.7% to $104,000) and Montgomery County, PA (16% to $99,000).

To view the full report, including charts, tables and methodology, please visit: https://www.redfin.com/news/starter-home-affordability-february-2024

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, title insurance, and renovations 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. Customers selling a home can have our renovations crew fix it up to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we’ve saved customers more than $1.6 billion in commissions. We serve more than 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.

Contacts

Contact Redfin
Redfin Journalist Services:
Angela Cherry, 913-638-8249
press@redfin.com