Tweet This
House hunters shrugged off stock market volatility and unsteady overseas economies in August, pushing the Redfin Housing Demand Index up up 9.6 percent to 103 from 94 a year ago. The number of Redfin customers touring homes held steady from July to August, but fewer people made offers to buy.
Last month we forecast that prices would rise 5.3 percent in September and sales would increase 10 percent. In October, we expect prices to rise 5.1 percent from a year ago and sales to increase 7.9 percent
While the usual seasonal slowdown is under way, homebuyer demand is still strong. However, there are warning signs.
Tours are outpacing purchase offers by a wide margin, suggesting that it takes more effort to find a home. In 2014, one in six Redfin customers who requested a tour eventually made an offer. So far this year, it’s one in seven.
“Buyers are worried about too-high prices and are more cautious about making offers,” said Karen Krupsaw, Redfin vice president of real estate operations. “We’re seeing that sellers are getting the memo, as more people are dropping their prices in the past few weeks.”
Low inventory is holding them back. Although newly listed homes increased 10 percent in August, it still wasn’t enough to meet demand. The result was 0.3 percent fewer homes for sale overall compared to the same time last year.
With too few homes to choose from, house hunters are touring more to find one they like and can afford. Buyers today would rather keep searching than overpay for a home. Sellers are beginning to come to terms with this mindset and some have started lowering their prices.
The Upshot: The housing market slowly is shifting towards buyers, but it’s not there yet.