The Redfin Housing Demand Index remained virtually flat, up slightly from 126 in July to 127 in August. Still, the Demand Index increased 27.7 percent year over year. The Demand Index is adjusted for Redfin’s market share growth.
The Demand Index is based on thousands of Redfin customers requesting home tours and writing offers. A level of 100 represents the historical average for the three-year period from January 2013 to December 2015.
Across the 15 metros covered by the Demand Index, there were 13.9 percent fewer homes for sale in August than there were a year prior, and there was a 2.7 percent decline in new listings. August marked the 27th consecutive month of year-over-year inventory declines in these markets.
“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 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.”
The seasonally adjusted number of buyers requesting home tours and writing offers remained flat from July to August, decreasing 0.8 percent and increasing 0.1 percent respectively. Compared to last year, 42.3 percent more buyers requested tours in August and 8.2 percent more wrote offers.
Metro-Level Demand Highlights
Below, we provide a slideshow of local charts for each of the metros tracked by the Redfin Housing Demand Index and highlight noteworthy trends and agent insights from select markets. If you’d like to learn more about a particular market, please email firstname.lastname@example.org.
Oakland had the largest Demand Index increase in August, up 29 percent from July and 43 percent year over year. Inventory was down 30 percent year over year and new listings fell 5.3 percent.
“August has traditionally been one of the slowest months in Oakland for homebuyer activity as people go on vacation and finish up their family activities before the kids head back to school,” said Redfin Oakland agent Tom Hendershot. “This year, August demand has really ramped up compared to July, and we expect September to be a very active month as long as more new inventory hits the market.”
Denver saw the largest decrease in homebuyer activity in August, with its Demand Index down 54.2 percent from July. Inventory there was down 9.3 percent and new listings fell 8.8 percent year over year.
“Denver usually sees a drop in homebuyer demand in August, but this year was slower than we’ve seen in recent years,” said Redfin Denver agent Martin Mata. “Homebuyer fatigue has set in and buyers are frustrated because they’re priced out of homes they could afford a couple years ago. We’ve actually had other agents tell us that their clients will back out if there are multiple offers on a listing because people are so fed up with bidding wars.”
For more detail on the Redfin Demand Index methodology, click here.