Redfin’s CEO warns of early signs of weakness in the U.S housing market
The U.S. housing market continues to struggle, with companies such as Zillow Group and Redfin feeling the impact. The trend may continue in the coming months, leaving many Americans struggling to find affordable housing.
Redfin CEO Glenn Kelman said during the company’s earnings call on Wednesday that “We think that the housing market could get worse.” He added that “We haven’t seen U.S. home sales dip below 4 million units a year in decades – and the US population has grown.”
As a result of this downturn, Redfin is laying off employees for the second time this year, eliminating 862 positions, or 13% of its workforce. It is also shutting down its home-flipping program RedfinNow.
The cost-cutting measures are a response to the broader housing market downturn, which is due in part to rising inflation and mortgage rates. Single-family housing starts, which indicates the groundbreaking of a new home foundation, dropped nearly 19% in September. The number of building permits allocated fell as well.
These trends indicate that the US housing market is weakening and that Seattle real estate tech companies are feeling the impact. It remains to be seen how long this trend will continue.
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