Housing demand has hit a low in July following an all-time high in June. The Housing Demand Index from Redfin reported a drop from 130 to 124 month-over-month in July, however, the index is still up by 29.7 percent year-over-year. The Demand Index is based on numbers of potential buyers looking at homes through tours and written offers, and a level of 100 represents the historical average for the three-year period between January 2013 and December 2015.
Redfin notes that there were 13.9 percent fewer homes for sale in July year-over-year across the 15 metro areas covered by the index, with a 5.9 percent decline in new listings. July is the 26th consecutive month to experience a year-over-year inventory decline.
Redfin’s Index found that 3.3 percent fewer buyers requested home tours, and 11 percent fewer buyers wrote offers month-over-month. Year-over-year, 35.3 percent more buyers requested tours while 21 percent more wrote offers.
"Buyer demand has been stronger so far in 2017 than last year, but the combination of low inventory and rising home prices is taking its toll heading into the fall,” said Redfin Chief Economist Nela Richardson. “Sellers are still in control of the market, but their advantage is narrowing as buyers are becoming less willing or able to chase escalating prices.”
By metro area, Baltimore had the largest increase in its Demand Index, jumping 26.5 percent month-over-month in July, but like the rest of the country, the Baltimore area was hindered by low inventory. Inventory was down 18.6 percent year-over-year, however, there were 5.1 percent more homes listed for sale in July.
With its Demand Index falling by 35.2 percent month-over-month, Boston experienced the biggest drop in homebuyer interest in July. In addition, inventory in Boston fell by 20.1 percent, with new listings down 2.1 percent year-over-year.