No one expected this. REDFIN reports shocking 2026 housing market flip/

Ajouté : 2026-05-11

[00:00:00]The 2026 housing market just exhibited its first sign of life this year with Redfin reporting a surprise increase in home buyer demand at the end of April and beginning of May. In this video, I'm going to dissect that data and try to analyze whether this increase in buyer demand in the last 2 weeks is real or whether it's a dead cat bounce. With Redfin reporting that pending home sales just hit the highest level in nearly four years. They're showing that US pending sales hit their highest level since September 2022, up 7.7% year-over-year. Markets where pending sales rose most were Chicago, Pittsburgh, San Francisco, Miami, and Austin, all up over 15% year-over-year.

[00:00:40]Now, as I've been telling you since the start of 2026, home buyer demand was at record lows. So, this increase we're seeing is coming off a very low base.

[00:00:50]And I have some skepticism that we're going to actually see this increase continue into the future with pending sales figures from the National Association of Realtors in the first quarter of 2026 being about 30% below the long-term average. So with this Redfin report, it's reasonable to expect that the N report in April will be a bit higher. There's going to be a lot of people getting excited in a couple weeks about a recovery in the housing market.

[00:01:16]And so I just want you all to be informed of that. expect in the next two to three weeks there will be articles coming out talking about a housing market turnaround. However, I'm a little skeptical of the durability of this increase in pending sales and contract signings because if we look at the data, not much has changed on the US housing market in terms of affordability and in terms of what buyers can afford. with the typical mortgage payment to buy a house inclusive of taxes and insurance now hitting almost $2700 a month as of April 2026. You can see that this is near a record high level and it's almost double what the payments were prior to the pandemic. So the affordability it's improved a little bit everyone prices have dropped in certain markets.

[00:02:00]Mortgage rates have dropped a little bit but this is still a very expensive cost to buy especially compared to the cost to rent. costs about $1,920 to rent a typical house or apartment in the US.

[00:02:12]Meaning that the cost to buy is $761 more per month on average across the country. One of the highest premiums to buy on record, comparable to what we saw at the peak of the previous bubble in 0607. And so so long as the cost to buy is way higher than the cost to rent, I think it's going to be difficult for there to be a sustained improvement in buyer demand in the US housing market.

[00:02:37]Because for most buyers, especially firsttime buyers, they're going to do the math and they're going to see that to buy the same house that they're renting, it's going to cost 30 to 40% more. And I think one point of contention for a lot of Americans uh in terms of buying a house right now is the insecurity in the job market. So, not only is it record worst affordability on one side, it's the fact that more and more people are feeling like their job might not be safe. More and more people are feeling like even if they do have a good job, maybe it won't be there in four to 5 years. And maybe some people are just getting lower raises than they were before. And I think the combination of these factors is an additional headwind weighing down on buyer demand right now. is if we go to a website called Layoff Hedge, which tracks all the layoffs occurring in the economy, we can see they're coming fast and furious.

[00:03:30]Just today, there's been over 3,100 layoffs announced. To date, there's been almost 400,000. Recently, companies like Upwork, Cloudflare, Verizon, Ticketmaster, PayPal, and Coinbase have all announced big layoffs on the order ranging anywhere from 8 to 30% of workforce at these companies just in the last two or three days. And you can see more and more of these layoffs have the tag AI driven. These companies are coming out and saying that due to AI advances, they don't need as many workers as they did before. or one particular interesting one is Cloudflare, a network and cyber security company. They just laid off 20% of their workforce in an AI first restructuring.

[00:04:11]Cloudflare said on Thursday it would lay off about 20% of its workforce as part of a shift towards an agentic AI first operating model. But what's crazy everyone is their first quarter revenue actually increased 34% year-over-year. So this isn't a company that's struggling financially. They're crushing it on revenue growth, yet they're laying off 20% of their company.

[00:04:33]You know, I reported this to you guys a couple months ago when Block did the same thing. Meta just did some big layoffs. Oracle just did some big layoffs. A lot of people said these layoffs were just uh maybe responding to overhiring during the pandemic, but doesn't really seem that way anymore, everyone. It seems like these tech companies especially are really trying to cut workers. And just one has to wonder what is that going to mean for housing market demand particularly in the cities where there's the most tech workers, the most remote workers and those exposed to artificial intelligence. But here is something funny in the Redfin report. When you break out the increase in pending sales in early May by Metro, you see something actually really fascinating. Two markets that had the biggest increase in pending sales were actually Austin and San Francisco. Markets with a heavy exposure to tech, a heavy exposure to AI job disruption. Pending sales in those markets went up 15% year-over-year.

[00:05:30]Additionally, pending sales were up 19% year-over-year in Chicago and 17% year-over-year in Pittsburgh. I've been telling you guys about these Midwest markets for the last 6 months, particularly Chicago. Chicago is officially a boom housing market right now with how much uh demand there is and how low inventory is. Additionally, Miami posted a 15% year-over-year pending sales increase. Now, to be clear, these increases in pending sales don't mean demand in these markets is great or even back to normal. It's coming off a very low level. However, there is positive movement in some of these markets that Red Fin is calling out. The reason I think sales are going up in San Francisco and Austin despite the job market heads headwinds is because prices went down in those markets significantly the last three or four years. In Austin, prices are down 25% from their peak in the middle of 2022. In San Francisco, particularly San Francisco County, prices went down almost 20% through uh the early part to middle part of 2025. So these are two markets that had heavy corrections and have much more affordability than they used to. And if we consult Revententur's overvaluation metric and look at the most and least undervalued metro areas in America for home prices, we can see Austin is now back to being fairly valued. Austin probably in a month or two is actually going to be undervalued on Revententures metrics. And that's one reason why pending sales are going up.

[00:06:58]You know, I called a couple months ago on this channel that Austin was going to start seeing a turnaround this year because the prices were getting more affordable and that's starting to happen. At the same time, let's zoom in on San Francisco. In San Francisco, values are actually 14% undervalued.

[00:07:13]While San Francisco is a very expensive housing market, you can see it's become an undervalued housing market compared to its long-term norms. The home value to income ratio in San Francisco is now below the long-term average.

[00:07:25]Additionally, we can see Chicago's housing market is only 5% overvalued.

[00:07:32]Only 5% overvaluation in Chicago. And in Pittsburgh, there's only 4% overvaluation. So, this is actually the trend in the story we're seeing. The markets where the pending sales are going up are the ones with the least overvaluation or that are undervalued.

[00:07:50]And I believe that that's not an accident. Red Finn's pending sales data is completely a separate data set from Reentur's overvaluation data set. Yet, they're pointing a similar story. The more fairly valued or undervalued markets are starting to see an improvement in pending sales, and I don't think it really has anything to do with the economy. I think it just has to do with the fact that these markets have more local affordability than they used to. But we should still be cautious approaching this housing market because when we look at the fundamentals, the fundamentals say we're still in a massive price bubble on a national basis. The fundamentals still say demand is at record lows, more or less, despite this Red Fin report. Demand for the most part still at record lows. And uh Reentur's home buyer demand index, an index I invented to help track buyer demand in the market, that only went up a little bit over the last week. Uh, Revententur's demand index is now an 11 out of 100, which is way below the long-term average, still near a record low. And we actually just added the Reventure demand index to Reventures website, so you guys can actually track it yourself. If you go to reventure.app/housing app/housing index. You can track Reventures demand index over the last 20 years, as well as the components of the demand index, which include mortgage purchase applications, pending sales, Google searches for homes, and buyer sentiment.

[00:09:13]And uh, you know, I'm actually really excited about this because some of these long-term graphs that I've been showing you on this channel for the national housing market, you guys now have access to it for free if you go to ww.reventure.app/housingindex.

[00:09:28]And this one subcomponent of the index is one that gives me uh some heartburn about the market right now and makes me skeptical that we're seeing any type of a real rebound. It's the percentage of Americans who think it's a good time to buy a house, which I what I call home buyer sentiment. How many people think it's a good time to buy? Currently, only 21% of Americans think it is a good time to buy a house. You could see that this has been at a record low more or less uh for the last four years and it's down significantly from normal. Normally 70 to 80% of Americans think it's a good time to buy a house historically. Only 21% of Americans think it's a good time to buy today. So that's telling you a snapshot just of how Americans feel about the US housing market right now and that there's no real marketable improvement in the fundamentals of demand from that perspective. Additionally, we also track Google searches. Google searches for homes for sale. This is another forward-looking metric. Google searches for homes for sale. And we've seen a little bit of a recovery in this from the lows from 2024, but not enough, folks. You can see the Google searches seasonally adjusted are down about 30% from the peak in 2021.

[00:10:54]It's still well below this long-term average line. And so there's fewer Americans searching for houses on Google. And of course, mortgage applications to buy a house are also still near the lowest levels on record.

[00:11:06]There's been a little bit of a lift, but uh still down 35% from prepandemic norms. And I say these things not to be negative on real estate. You know, I have no desire to paint a negative picture of the housing market, but I'm simply just reporting the data for you guys out there as buyers, sellers, investors, realtors. I want you all to really understand the truth about what's going on in the market. And one thing I just consistently see is a lot of the mainstream reporting gets it wrong a lot of the time. And you know, sometimes they get it right. Sometimes the mainstream reporting gets it right. But a lot of times they also just, you know, get it wrong. And they miss the big picture. And that big picture is the fact that Americans cannot afford to buy houses right now. They legitimately can't qualify for mortgages. They legitimately don't want to buy a house even if they can afford it. I mean, I know a lot of people who can't afford to buy a house right now who aren't buying. And these people, they would rather rent. They would rather rent because it's easy to rent right now. Rent is cheaper than buying. And there's this perspective that if you buy a house today at today's prices in this market, you're buying a liability where the tax bill is going to go up in the future, the insurance bill is going to go up in the future, and you're going to have escalating costs and expenses, and you're going to have to pay for maintenance, and you're going to have to do all that. And I think for a lot of people, they just don't want to take on that burden right now. The other thing I would talk about here, everyone, is uh the job market. We talked about kind of the weak job market in terms of hiring and some companies firing people.

[00:12:41]It's never been more important than ever right now for someone in professional services, especially in tech and finance and HR and marketing. It's never been more important to really be on your game with your professional career and to really be on your game with the advances in AI and know what's going on and to have your skill set honed. And so, how much time do people have to spend in renovating their new house? How much time do people have to uh spend fixing light bulbs right now uh in this cutthroat job environment where if you're a step or two behind in professional services and white collar jobs I mean these companies are just laying people off as a result. So it's never been more important than ever to focus on your skills, focus on your career and make sure that you're marketable and employable. And in some ways this is at odds with owning a house. In some ways, it's at odds with buying a house. You know, buying a house is like this moment where it's like, I figured out my career. I'm stable in my career. I have some extra money on the side, and I could see where the path forward is going to be the next 10 years. But that's not the economy we're in at all right now. The economy we're in right now is in massive upheaval, for better or for worse. And not many people know what things are going to look like 5 to 10 years from now. So, no wonder there's some hesitancy to buy. However, on that point, I actually just wanted to show you some additional data on the job losses and unemployment claims in the US because there's some contradictory data floating around here. On one hand, we have all the layoff announcements, the CEOs saying the quiet part out loud. But on the other hand, when you look at unemployment claims and unemployment, it's not that high. Check out this graph, everyone. This graph from Fred tracks the continuing unemployment claims in the US. People who are making unemployment claims in recurring months.

[00:14:35]How many Americans are doing that? You of course can see the big spike during the pandemic which completely threw off the axis on the graph. However, uh previous recessions like 2009, we had 6.6 million people on continuing unemployment claims. In the dotcom bubble, we had 3.5 million people on continuing unemployment claims. In the early 1980s recession, we had 4.6 six million people on continuing unemployment claims. But today, we only have around 1.8 million people on continuing unemployment claims. That's half the level that we saw in the.com bubble. It's about a a fourth of the level that we saw in the 2009 recession.

[00:15:10]And interestingly, we're actually seeing continuing in claims drop over the last 6 months. And this is data that states report to the federal government on how many people are claiming unemployment insurance by state. And so this is a bit confusing and a bit conflicting. I think most people could acknowledge the labor market is not that strong right now. In fact, it's it's probably not very good if you're in the white collar professions. But uh this is saying that something isn't quite transferring that even though there's layoffs, even though hiring is low, we're not seeing people running out and claiming unemployment.

[00:15:46]Uh certainly in the same way they've done in previous job market recessions.

[00:15:50]And so that's a bit curious and one just has to wonder like are we eventually going to see those unemployment claims go up? Is there a lag? I'm not sure. I'm I'm surprised they're going down. I mean I thought at least they'd be holding steady. Um I thought maybe they'd be going up, but they're actually going down for sure. We are in a dynamic economy and housing market. I I don't think things are going to be the same in 6 to 12 months like they are now. And one metric I am actually looking at right now is those trends in home sales and buyer demand. Where is the buyer demand up? Where is it down on the housing market from the long-term average? And to understand that, we actually developed a metric for you guys called home sales surplus or deficit.

[00:16:29]We're looking at that on Revententure app right now. How many homes are being sold in different markets compared to the long-term average? And you could see on a state-by-state basis, most states are in a deficit compared to the 12-year average of sales. California is one of the biggest. Sales in California are down 21% from normal. Sales in Georgia are down 13%. In Pennsylvania, they're down 16%. In Michigan, they're down 21%.

[00:16:53]Even in Illinois, despite Chicago's rebound, Illinois sales are still down 13%. And it's really important to look at this data over time because if you see some of these big drops in sales, that's really important to understand.

[00:17:07]Now, one caveat I want to uh offer to you all out there is that sales are just one data point to look at. As you can see in this zip code in Chicago, demand is way down, right? But we actually have a plus 9.4% forecast in the next year in a zip code where demand is down. And you ask, Nick, how is that possible? How could you be forecasting prices to go up in an area where demand is down? Well, you also got to check the inventory. How many homes are for sale? Well, in the zip code, one reason why demand is down is the amount of listings for sale are down 80% the last 6 years. In addition, the days on market is also down to 18 days on market. So, if you're at 18 days on market and inventory is down 80%.

[00:17:59]You're still going to have price appreciation even if the overall number of buyers walking through the door is lower than normal. And you can access all of that data on a premium plan on Reventure app for only $39 a month.

[00:18:12]Everyone, Reventures housing data is going to help you make a more educated decision in buying or selling your house this year. And the monthly subscription only costs.001% of the cost of buying a house. The annual subscription costs 0.1% of the cost of buying a house. Uh if you get that fullear annual subscription, go to ww.reventure.app app right now and sign up for that premium account so you could track the inventory, the days on market, the home sales data, and get that 2027 price forecast for your area so you know what's happening.