Buyers Being Choosy As Demand Drops

Monthly index data from Redfin show that housing demand declined nearly 10 percent annually in June 2018, the largest such drop since April 2016.

Overall, the real estate site's data found that supply has gone down, but the number of listings increased in several critically tight markets, like Seattle and Washington, D.C., even though demand fell. On the other hand, Chicago and Atlanta had demand gains in the index, CNBC reports, even though the available inventory in both cities was down. Home prices in Seattle were up more than 13 percent in May 2018, while they increased only by between three and five percent in Chicago and Atlanta, respectively.

Red-hot home prices, rising mortgage interest rates, very few listings at the entry level and a high rate of student loan debt have weighed on buyers for a while, but a strong economy and growing employment had mitigated those factors. Now, however, a market stalemate is developing as rates and prices continue to rise, further weakening affordability. As a result, the number of people requesting home tours fell 6.1 percent annually in June ... There were 15 percent fewer offers made on homes as well.

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