By Sam Boughedda
Investing.com -- Redfin Corp (NASDAQ:RDFN) stock tumbled 4% Thursday after it told investors that early-stage homebuying demand continues to falter this spring.
New listings fell 7% from the previous year, according to the company's latest report.
"At the same time, the average 30-year fixed mortgage rate shot up to 5% and the median asking price climbed to $397,747, sending the typical homebuyer’s monthly payment up 35% year over year to an all-time high of $2,288," the technology-powered real estate brokerage explained.
Redfin pointed to "key early indicators" that show a softening of demand, including fewer Google (NASDAQ:GOOGL) searches for "homes for sale," Redfin's seasonally adjusted Homebuyer Demand Index has declined 3% in the past four weeks compared to a 5% rise in the previous year, and mortgage purchase applications falling 6% year-on-year.
"There really is a limit to homebuyer demand, even though the market over the past few years has made it seem endless,” said Redfin Chief Economist Daryl Fairweather.
“The sharp increase in mortgage rates is pushing more homebuyers out of the market, but it also appears to be discouraging some homeowners from selling. With demand and supply both slipping, the market isn’t likely to flip from a seller’s market to a buyer’s market anytime soon.”
A Redfin real estate agent in Boston was quoted as saying that every recent offer has faced multiple other offers, but some people have finally had enough and are pulling out as they become less willing to make a risky offer.