In a second consecutive month of declines, the Redfin Housing Demand Index fell 6.5 percent in March to 105 points, according to the latest data released by the online brokerage firm. The index is based on 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.
The data revealed that though the number of buyers making offers fell 14.7 percent between February and March, buyers requesting home tours increased 2.6 percent from February 2018. On a year-over-year basis, the number of buyers requesting home tours increased 6.2 percent, while buyers making offers fell 17.1 percent. The index itself saw a decline of 3.8 percent from its March 2017 levels.
A shortage of home supply is one of the key reasons behind the fall in the number of people actually buying a home, the data indicated. Across the 15 metros covered by the index, the number of homes for sale fell for the thirty-fourth consecutive month, declining 13.6 percent year over year in March. The data reported 7.3 percent fewer homes that were newly listed for sale last month than a year earlier.
Redfin says that it expects listings to pick up in April and May, which is generally the peak spring buying season for real estate. Also, an early inventory in the first half of April suggests that the number of homes for sale was increasing in line with seasonal expectations, according to Redfin.
“Abnormally late winter weather and an early Easter likely delayed homeowners planning to list their homes for sale in March,” said Nela Richardson, Chief Economist at Redfin. “While inventory levels are still not nearly high enough to meet strong buyer demand, we do expect listings to pick up in April and May.”