Sam Boughedda

Investing.com — Redfin Corp (NASDAQ) stock tumbled 4% Thursday after it told investors that early-stage homebuying demand continues to falter this spring. 

The company released its latest report, which showed that new listings dropped by 7% over the year before. 

“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 cited “key early indicator” which showed a slowing in demand. Redfin’s seasonally adjusted Homebuyer Demand Index dropped by 3% in four weeks, as compared to an increase of 5% in previous years. Meanwhile, mortgage applications fell by 6%.

“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.”

Redfin Boston real estate agent was quoted saying that while every offer received has been rejected multiple times, some individuals have had enough. They are less likely to accept risky offers.