RMAX - Home prices slide 1% in February to mark first Y/Y slump since 2012: Redfin

2023-03-17 09:57:51 ET

The median U.S. home price decreased 1.2% in February as higher mortgage rates hampered affordability and thus demand, marking the first annual slump since 2012, Redfin ( NASDAQ: RDFN ) reported Friday.

“The drop in prices is bringing more house hunters off the sidelines, but they’re in no rush because rates are high and they have the upper hand,” said Andrew Vallejo, a Redfin real estate agent in Austin, Texas.

The report pointed out that the housing market took a turn for the better in March after the failure of Silicon Valley Bank and the subsequent turmoil surrounding the banking sector lowered the likelihood of the Federal Reserve rates much more this year. That in turn pushed down mortgage rates, bringing more buyers back to the market.

Separately, Re/Max ( RMAX ) said that home sales climbed 16.8% M/M in February, snapping a five-month streak of sales declines and the largest increase in 11 months.

"Prices have steadied and demand is strong, but the lack of available, affordable homes remains a challenge," said Re/Max President and CEO Nick Bailey.  "Mortgage rates are top of mind for many buyers, and as they move up or down, sales activity should generally follow suit. That's a big factor to watch as we move into the spring."

On Thursday, mortgage rates fell after five straight weeks of increases .

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