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Homebuyer Demand Drops Further in August

""Redfin"":http://www.redfin.com/ reported another slip in homebuyer demand in August, with both home tours and offers declining.

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According to the brokerage's monthly Real-Time Demand Pulse, August saw a 10 percent month-over-month drop in the number of customers requesting home tours, with tours falling 9.5 percent week-over-week in the last week alone. Tour requests declined 6.0 percent in July-August 2012.

The number of signed offers from Redfin customers also dropped, falling 7.5 percent from July (compared to a 4.3 percent drop in 2012) and 0.9 percent in just the last week (compared to a 0.7 percent gain the year before).

While homebuyer demand typically falls from July to August--signaling the end of the normally active summer season--this year's drop in demand was more drastic than usual, says Redfin analyst Ellen Haberle.

""A combination [of] factors weighed on demand in August,"" Haberle commented. ""Mortgage rates and home prices continued to inch higher, pricing more buyers out of the market. Moreover, the inventory of homes for sale remains very tight, which probably is leading more buyers to delay their home-buying plans.""

Looking ahead to the rest of 2013, Redfin is keeping its eye on mortgage rate trends, which will likely play an even bigger role.

""If rates spike above five percent, many buyers who have been rushing to find a home while rates are low may step out of the market temporarily, which would trigger a sharp drop in demand,"" Haberle concluded. ""On the other hand, if rates remain stable, we expect demand will flatten this autumn.""

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