Buyer Demand Slow to Recover in February

With the spring shopping season fast approaching, homebuyer demand has yet to show any signs of waking up from its winter nap.

Redfin released Thursday its Real-Time Demand Pulse, a monthly analysis of home tour requests and signed offers across 23 surveyed markets.

According to the company, the number of home tour requests among thousands of its customers grew only 1.9 percent between January and February, falling short of a 6 percent increase over the same months in 2013.

Meanwhile, signed offers increased 17.8 percent compared to a 20 percent jump last year.

While any increase in activity could be taken as a positive sign compared to the alternative, Redfin notes much of February's monthly growth stemmed from the company expanding its market share.

With increases in both home prices and mortgage rates chiseling away at housing affordability, the company says many homebuyers are having difficulty adjusting, leading to last month’s weak numbers, especially as investor activity recedes.

“This year, there are fewer all-cash buyers and investors in the market. Those that remain are traditional buyers who have tighter budget constraints and are struggling with sticker shock,” said Redfin agent Eric Tan.

Given the relative softness in demand in February, the brokerage expects home sales will be similarly weak in March—though analyst Ellen Haberle noted an uptick in the past 10 days, “which could be a positive sign for April sales.”