2023-04-28 14:35:00 ET
Shares of Redfin (NASDAQ: RDFN) slipped 14.5% this week, according to data from market Intelligence - opens in new tab" data-uw-rm-brl="false" data-uw-rm-ext-link="na" data-uw-styling-context="true" href="https://www.spglobal.com/marketintelligence/en/" target="_blank"> S&P Global Market Intelligence . The online real estate marketplace didn't post financial results, but a slew of data coming in about the state of the U.S. housing market has investors bearish on the stock. As of this writing, shares of Redfin are down around 40% over the past year and off 80% from all-time highs set in early 2021.
Redfin makes money by taking a cut of every home sold through its platform, mortgage loan referrals, and its iBuying home-flipping business. So, the more people who are buying and selling homes in the United States, the better.
With home prices near record highs and the average 30-year mortgage above 6%, home affordability has reached an all-time low in the United States. According to Redfin's own analysis, the monthly mortgage payment on the median asking price for a home in the United States is now $2,555, up from around $1,500 in 2020 and 2021 (and those weren't near all-time lows, either). This has priced out millions of potential homebuyers who cannot afford these monthly payments, drying up housing activity in the United States. In March, the seasonally adjusted annual rate of home sales was 4.44 million, down significantly from over 6 million during the heart of the pandemic and the post-great financial crisis average of around 5 million to 5.5 million.
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Why Redfin Stock Slipped This Week