The Redfin Housing Demand Index remained relatively flat from July to August, rising slightly from 126 to 127. However, on a year-over-year basis, it is up 27.7 percent. The Demand Index is calculated using the number of Redfin customers requesting home tours and writing offers.
According to Redfin, there were 13.9 percent fewer homes for sale in August 2017 compared to August 2016 in the 15 cities that it tracks. There was also a 2.7 percent year-over-year decline in new listings. This marks the 27th consecutive month of year-over-year inventory declines.
“High consumer confidence and low interest rates have powered homebuyer demand, but too-low inventory has constrained home sales all year,” said Redfin chief economist Nela Richardson.
The number of buyers requesting home tours and writing offers remained flat month-over-month. Home tour demand decreased 0.8 percent from July to August, while the number of buyers writing offers increased 0.1 percent. However, year-over-year, the demand for home tours jumped 42.3 percent from August 2016, and 8.2 percent more buyers wrote offers in August 2017 compared to last year.
“The Federal Reserve is now setting the stage for a slow, steady increase in mortgage rates in October by beginning to sell its mortgage portfolio. Fall buyers are likely to face slightly higher financing costs in addition to strong price growth,” Richardson says.