The Demand Index posted its largest year-over-year decline since March 2016
SEATTLE (Sept. 25, 2018) – The Redfin Housing Demand Index has remained roughly unchanged for the past four months, inching up 0.3 percent from July to 125.2 in August, according to Redfin (www.redfin.com), the next-generation real estate brokerage. Redfin has reported an increase in price drops and softening demand in previously hot markets, which point to an environment enabling homebuyers to be more choosy. The number of people requesting home tours rose 3.4 percent month over month, while the number of buyers making offers remained roughly flat.
While demand has not changed much in the last four months, it remains well below the levels Redfin reported at the same time a year ago. The Demand Index was down 11.9 percent year over year in August, the sixth consecutive month of year-over-year decreases. The number of homebuyers requesting tours fell 3.5 percent year over year, the third consecutive month of annual declines. The number of homebuyers making offers dropped 20.2 percent year over year in August, the sharpest annual decline since March 2016.
The Redfin Housing Demand Index is based on thousands of Redfin customers requesting home tours and writing offers in 15 major metro areas in the U.S. The Demand Index is adjusted for Redfin’s market share growth and for seasonality. A level of 100 represents the level of homebuyer demand posted in January 2014. “The housing market is past the heydays of spring and early summer, when most homes received multiple offers from buyers desperate to get a home under contract,” said Taylor Marr, Redfin senior economist. “Several factors are contributing to stalling demand. Tax reform and higher home prices are causing homebuyers to be more careful about their decision-making. Meanwhile buyers on the West Coast are finding that a growing supply of homes can work in their favor, enabling them to be more selective and make less aggressive offers. While overall demand still remains strong, easing inventory pressure is allowing home buyers to be more careful in their purchases.”
Several metro areas posted month-over-month increases in the Demand Index, including San Francisco (4.4%), Chicago (3.1%), and Atlanta (1.7%). But those gains were moderated by declines in Orange County (-10.8%), and others.
To read the full report, complete with additional data and charts please visit: https://www.redfin.com/blog/2018/09/redfin-housing-demand-index-august-2018
You can learn more about the methodology behind the Redfin Housing Demand Index and the data sources we use to measure housing activity prior to purchase. The Demand Index methodology was revised in July to improve the way it accounts for seasonality.
Redfin (www.redfin.com) is the next-generation real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer’s favor. Founded by software engineers, Redfin has the country’s #1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the automated home-value estimate with the industry’s lowest published error rate for listed homes. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 80 major metro areas across the U.S. The company has closed more than $60 billion in home sales.
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