The index declined 6.2% to 127 in November from 136 in October. Redfin said the decrease reflected a slight 1.9% drop in the seasonally adjusted number of buyers requesting homes tours, as well as the 14.7% month-over-month drop in the number making offers.
“Three years of low inventory is taking its toll on buyer demand in terms of tour and offer activity,” Redfin Chief Economist Nela Richardson said. “People still want to buy homes, especially before mortgage interest rates increase and prices rise even more. But there just aren’t enough homes for sale, especially at lower- to mid-level prices.”
Although the index recorded a monthly decline, the year-over-year was a different story. The November Demand Index rose 29.1% compared to the same period last year. There was a 41.3% increase in the number of buyers requesting tours over the same period, while 10.5% more buyers wrote offers in November this year.
Redfin said there were 18% fewer homes for sale in November compared to the same period in 2016 across the 15 metros covered by the Demand Index. Inventory has declined in these markets year-over-year for the 30th consecutive month in November. The month also marked the fifth straight month of double-digit declines in inventory. New listings only increased 1.5% year over year.
Redfin bases the Demand Index on customer requests for home tours and their offers. A level of 100 represents the historical average for the three-year period from January 2013 to December 2015.
Housing demand declines slightly in October on softer offer activity
Inventory shortage keeps housing demand steady
Buyer demand slipped in November from October as the inventory shortage continued to impact home tours and offers, according to the Housing Demand Index released by Redfin.