From August to September 2018, the Redfin Housing Demand Index saw 5.1 percent growth, indicating robust growth, though demand is still lower now than it was this time last year.
The reading was bolstered by buyers requesting more home tours (11.2 percent growth), rather than offer-writing (8.1 percent). Home tour requests had the largest monthly gain in 16 months. Redfin reports that rising rates may be helping buyers back onto the market, seeking to buy before another increase. Additionally, supply grew from August to September 0.7 percent, contrary to the typical market conditions of lower inventory from August to September.
Inventory increased the most in hot coastal metros including San Francisco (47.7 percent) and Boston (17.1 percent). In metros where inventory has increased, buyers are interested in exploring all of their options. However, research by psychologists has shown that when people are faced with more options they have a harder time making a decision for fear of making the wrong, or sub-optimal, decision. This phenomenon is reflected in the fact that touring activity increased more than offer activity as supply increased.
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