Fewer listings and therefore fewer offers marked the end of 2017 for the housing market according to data on housing demand from online real estate brokers, Redfin that was released on Tuesday.
The Redfin Housing Demand Index is based on data from Redfin customers requesting home tours and writing offers and is adjusted for Redfin’s market share growth. It covers data from 15 major metro areas across the U.S.
The data indicated that though the index remained flat on a month-over-month basis, year over year a growth of 8.4 percent over December 2016. It also indicated that the number of buyers requesting tours went up 16.7 percent while the number of buyers making offers slid 5.9 percent.
On a month-on-month basis, the index remained nearly flat falling 0.6 percent to 127.6 in December, compared with 128.3 in November 2017. The number of buyers requesting home tours fell by 3.4 percent during the month, while the numbers making offers fell 1.8 percent from November 2017.
December also marked the 31st consecutive month of falling supply according to the report, one of the reasons for the drop in offer activity. Inventory fell 20 percent year-over-year in December, marking the largest inventory decline since 2014, when Redfin first began tracking the 15 markets on this index.
“Buyer demand is still strong but wilted a bit in the face of low inventory,” said Nela Richardson Chief Economist at Redfin. “The housing market ended 2017 with 170,000 fewer listings than it had a year earlier, which means there were fewer homes for buyers to tour and make offers on. For the fourth consecutive year, inventory will be the major factor shaping the housing market in 2018.”