Redfin home sale transactions drop by 4% year-over-year

Yahoo Finance Live looks at Redfin's reported real estate transactions.

Video Transcript

[MUSIC PLAYING]

- It's time for Triple Play, the three stocks that we're watching in the final 30 minutes of trading. We've got Redfin, Uber, and PayPal. We'll start with my pick, which is Redfin, ticket RDFN, the tech driven real estate company.

Now, the stock is off about 8% today. And that says Needham analyst Bernie McTernan reiterated a hold rating on Redfin. Of course, you have housing inventory still tight in a rate rising environment. And this continues to weigh on Redfin's real estate transactions.

Those transactions fell 4% year-over-year in the second quarter. And that's the first drop apart from the second quarter of 2020 since they went public. Now Redfin also reporting today that nearly a third of all US home purchases were paid for with all cash in July.

Now, that's near the 8 year high reached in February, and up from 27.5% a year earlier. Now, this is something you can thank the Fed for. You have affluent buyers largely taking the all cash route to really avoid these rising mortgage rates, which have doubled from a year ago hitting 6% this month. Redfin shares, they're down around 80% year-to-date, Seana.

- Yeah, Virginia You mentioned that all cash buyer offer there. And it really just shows how many people are getting priced out of the market. It's already a very competitive market.

We take a look at home prices are up 18% still from where they were just about a year ago. If you have a third of buyers offering all cash offers, you're pricing out a lot of potential buys. They simply cannot afford the homes that are on the market right now. And Dave, when you take a look at some of the other numbers here, Redfin also releasing its August data saying that new listing's declining 8%, the lowest level that they've seen since May 2020. So not only are homes unaffordable, the fact that there aren't even new homes coming into the market, just shows how complex this situation is.

- Yeah, and I'm glad we were all blown away by that number. Again, it's a third of all home purchases in cash, which really tells you we have two different economies right now. My first thinking, it was people leaving New York, and maybe going to the Boise, Idaho, to the world where they were saving so much money.

It's not. 4 the top 5 markets are some of the most expensive markets in the United States, Long Island, which includes the Hamptons. And 3 of the top 5 are in Florida, that rates have gone up, or prices have gone up, around 30% plus over the last two years. So it is not affordable markets. It is the most expensive, fastest growing markets in the country, in terms of prices, which tells you an awful lot about this economy, where there are some stunning numbers from Redfin.

- It certainly does. And we heard Joe Brusuela, an economist, talking about the housing dynamic right now, earlier on in the show--

- Splitting us in half.

- --in how it is a split.