Housing Demand Cooled in October, Dropping to a Three-Year Average

The Redfin Housing Demand Index, based on thousands of Redfin customers requesting home tours and writing offers, declined 3.5 percent from September to a seasonally-adjusted level of 100 in October.

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A level of 100 represents the historical average for the three-year period from January 2013 to December 2015, meaning that demand in October was at recent historical norms.

In October, the number of Redfin customers requesting home tours fell 3.7 percent from September, and the number of customers writing offers on homes fell 5.9 percent. Both of these measures had posted double-digit increases in September.

One likely culprit is a shortage of homes to choose from, something that has put a damper on homebuyer enthusiasm month after month. Across the 15 metro areas tracked by the Demand Index, the number of homes listed in October was 9.5 percent lower than a year earlier. Those numbers dovetail with the shortages of homes reported in the most recent Redfin Real-Time Housing Market Tracker.