Home-buying Demand Strengthens Despite Stricter Lending Standards, Inventory Shortage Looms
April 23, 2020
Not Enough New Homes For Sale
Many sellers continue to sit on the sidelines, if they can afford to wait. In an April survey of 216 prospective sellers, Redfin found only 1 in 5 thought it was a good time to sell, down from 1 in 2 at the beginning of March. So it's no surprise that new listings for the seven days ended
The lack of inventory is one of the leading causes for a lack of sales, along with tighter lending standards and buyer concerns over the economy. Pending sales for the same period are down almost 50% compared to the same time last year.
Demand for Affordable Single-Family Homes Drives Bidding Wars Again
Agents from
After a few weeks of Redfin buyers being the only bidder or facing competition from one or two other offers, Redfin is hearing stories of bidding wars with four, five, or more buyers and homes selling above the asking price across the country. The stories are eerily similar; well-priced single-family homes have buyers with a stable income and strong credit fighting over scarce inventory.
On the other hand, it's been more difficult to sell a condominium, with pending sales down 56% for the seven days ended
In the
Low Inventory and Buyer Demand Anchors Prices
With inventory down so much, prices have been remarkably resilient. Median listing prices for the seven days ending
Layching Quek, a Redfin agent in
Tighter Lending Standards Will Hit First-Time and Lower-Income Buyers Hardest
Rates for 30-year fixed rate mortgages have continued to hover just under 3.5% for the past seven days, near all-time lows. But as Redfin reported last week, loans are harder to get.
Increased lending standards and concerns over job security, even for folks who are still employed, will limit opportunities for first-time and lower-income buyers. This threatens to deepen the divide between folks who can take advantage of historically low interest rates and those who can't save up a 20% down payment or haven't established their credit.
But where there's a will, there's a way. Recently Redfin has heard stories of multi-generational buyers, with families banding together to buy a home.
To read the full update, please visit: http://www.redfin.com/blog/housing-market-improving-covid-19-unemployment
To view charts highlighting more housing data from this past week, please visit: https://www.redfin.com/blog/housing-market-trends-coronavirus/
Redfin is publishing this housing-market update as a way to inform our customers, not our investors. Even though we're notifying investors through a government filing about this customer update, we're not updating, withdrawing, or affirming the first quarter financial guidance we issued on
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer's favor. Founded by software engineers, Redfin has the country's #1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the automated home-value estimate with the industry's lowest published error rate for listed homes. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 90 major metro areas across the
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
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SOURCE Redfin
Redfin Journalist Services: Isabelle Novak, (414) 861-5861, press@redfin.com