SEATTLE—Demand for homes grew for the second month in a row in August, according to a recent report from locally based Redfin. The Redfin Housing Demand Index, based on thousands of Redfin customers requesting home tours and writing offers, increased 1.7% from July to a seasonally adjusted level of 93 in August. The Redfin Housing Demand Index has a benchmark of 100, representing the three-year historical average from January 2013 through December 2015.

“Now we're seeing the market catch a new breath after pausing briefly this summer,” says Redfin chief economist Nela Richardson. “Buyer demand strengthened for the second month in a row, signaling that the market has some wind in its sails going into the fall.”

At the same time, Richardson says, the 2016 home-buying season has been less ferocious than it was the past three years. “Bidding wars are a tad less frequent, price growth is moderating and even in hot markets homes are sitting on the market a bit longer. All told, this is not a market in decline, it's a market finally finding its normal.”

The boost in homebuyer activity was driven by a surge in the number of Redfin customers making offers on homes, up 9.8% from July. The increase in overall demand would have been higher if not for the fact that the number of customers who requested tours fell by 3.6%. Redfin agents report that there is still a very large pool of people in the market to buy a home right now, but there simply aren't enough homes for them to take action on. Inventory across the 15 markets covered by the Demand Index fell 9.4% from a year earlier in August, which marked the 15th month in a row of declines.

National Highlights

*The Redfin Housing Demand Index posted a reading of 93 in August. This represents a 1.7% month-over-month increase and a 17.9% year-over-year decline in homebuyer demand. August marked the seventh-consecutive month of year-over-year declines in the Demand Index.

*The number of Redfin customers requesting home tours fell by 3.6% from July and increased by 5.3% from last year.

*The number of Redfin customers writing offers was up 9.8% month over month and fell by 6.7% year over year.

Metro-Level Highlights

*Denver posted the biggest month-over-month gain in homebuyer demand, up 92.2% in August. *San Francisco posted the largest monthly decrease, with the local Demand Index down 33.6%. *San Diego saw the biggest annual increase in demand, up 6.8%.

*The biggest year-over-year decrease in demand was seen in Denver, down 36.6%.

National Highlights

*The number of Redfin customers requesting home tours fell by 3.6% from July and increased by 5.3% from last year.

*The number of Redfin customers writing offers was up 9.8% month over month and fell by 6.7% year over year.

Metro-Level Highlights

*The biggest year-over-year decrease in demand was seen in Denver, down 36.6%.

Instant Insights /

Homebuyer Demand Increases Despite Fewer Homes to Choose From

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