Why Redfin Stock Plunged 18% in October
Shares of online real estate company Redfin (NASDAQ: RDFN) dropped 18% in October, according to data provided by S&P Global Market Intelligence. The poor housing market is significantly impacting Redfin stock, which is down more than 90% over the past year.
Redfin is an online brokerage company that aims to disrupt the traditional real estate sales model with more buying options, better service, and cheaper services. It posted high growth in 2021, with revenue increasing 117% to nearly $2 billion.
That pace has moderated dramatically in 2022. In the second quarter, its revenue increased 29% year over year, while its net losses climbed from $28 million to $78 million. Housing prices have increased, and mortgage rates have more than doubled from a year ago. The combination has made home purchases less affordable, and the housing market has slowed as a consequence. According to Redfin, the number of homes sold in the U.S. in September fell 22.5% year over year, while the number of homes for sale increased by 3.7%. October pending home sales fell by 35% compared to last year to their lowest number since 2015. And more homebuyers are relocating to cheaper areas in an effort to stretch the buying power of their money.
Source Fool.com
