May marked the sixth consecutive month that the Redfin Housing Demand Index showed year-over-year declines as it fell 5.3 percent to 114. The number of Redfin customers requesting tours increased by 17.7 percent year-over-year, which marked a slight decrease from April’s 19.8 percent.
As people have fewer and fewer homes to choose from, however, this increase in touring is not leading to an increase in offers. Compared to May 2015, 4.5 percent fewer people actually wrote offers in May 2016. The drop in offers written in May was the third straight month of year-over-year declines in offer activity, Redfin reports.
Even as the unemployment rate dropped to 4.7 percent across the country compared to 5.5 percent last year and interest rates on 30-year mortgages are at three-year lows, it was still unable to bridge the chasm that is low inventory.
Another sign of the tight inventory was how quickly homes sold in May and for how much. Homes sold at their fastest pace on record since at least 2009 as a typical home stayed on the market for just 15 days. Additionally, almost 29 percent of homes sold for above asking price and the average sale-to-list price set a new record at 99.7 percent, up 0.2 percent from one year earlier.