Home News Redfin to cut another 13% of workforce, shutter RedfinNow

Redfin to cut another 13% of workforce, shutter RedfinNow

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WASHINGTON (AP) — Online real estate broker Redfin is cutting 862 employees and closing its immediate cash subsidiary, RedfinNow.

The job cuts represent 13% of Redfin’s workforce, the company said in a regulatory filing.Redfin too Laid off 470 employees in Juneblames slowing home sales.

Redfin has cut more than a quarter of its workforce since April 2022, assuming the housing downturn continues “at least through 2023,” it said in a filing.

The average US long-term mortgage interest rate is hovering around 7%This is partly the result of the Federal Reserve’s six rate hikes this year, trying to stem 40 years of high inflation.federal officials raised benchmark lending rates It has trailed by three-quarters of a percentage point in the last four meetings, raising fears that its aggressive policies could plunge the U.S. into recession.

Further rate hikes are expected next year, but inflation data released by the government on Thursday could affect the Fed’s strategy.

The government recently estimated that the overall US economy returned to growth last quarter, but the Fed’s actions have cooled the once-red-hot housing market.

Home sales are slowing 8 consecutive months As first-time homebuyers pull out of the market and borrowing costs have already significantly reduced their options and inflation little by little from their incomeHomeowners looking to upgrade are also waiting for interest rates to rise and not wanting to jump into higher rates on their next mortgage.

Redfin said in its filing that it expects to incur costs of up to $23 million due to layoffs and downsizing.

Redfin has written down $18 million worth of inventory associated with RedfinNow. This is the result of the loss of value in homes purchased earlier this year. Redfin said it will continue to purchase homes under contract, renovate them and sell them quickly.

The Seattle company hopes to reduce RedfinNow’s inventory to about $85 million worth of homes by the end of January 2023. He currently owns approximately $265 million worth of homes through RedfinNow, and he has an additional $92 million in contracts.

RedfinNow enabled sellers to provide cash quickly without having to list their homes.

Redfin shares fell more than 8% in morning trading. They’ve lost about 90% of their value this year and were trading close to $100 each less than two years ago.

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