Housing Market: Searches, Tours Increase; Mortgage Rate Sensitivity Remains

Redfin’s Homebuyer Demand Index, which measures the number of requests for home tours and other services from Redfin agents, has increased 15 points since June 19, which reversed a 10-week trend of decreasing demand that began in April. People have also been increasingly searching for homes on Google, and touring levels have been fairly stable in the last two weeks. But just because people are looking for homes doesn’t mean they’re seeing the process all the way through to a sale. Fewer homes are being listed and are remaining on the market longer, with home prices falling as a result.

“The housing market seems to be settling into an equilibrium now that demand has leveled off,” said Redfin chief economist Daryl Fairweather. “We may still be in for some surprises when it comes to inflation and rate hikes from the Fed, but for now an ease in mortgage rates has brought some relief to buyers who were reeling from last month’s rate spike. Although the number of sales is down considerably from last year, first time-homebuyers with not a lot of cash are welcoming the decline in competition, and anyone who intends to stay in their home for many years doesn’t need to worry about these short-term fluctuations in home prices.”

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