Fewer home sellers requested home tours and wrote offers last month than they, did in the middle of winter, an unusual break in the traditional spring housing “heat” most real estate professionals have come to expect. According to Redfin’s Housing Demand index, which measures how many customers exhibit behaviors that indicate they are actively seeking a home to purchase, housing demand was 6.5 percent lower during the first month of Spring than at the end of winter. Redfin analysts credited “abnormally late winter weather and an early Easter” for “likely delay[ing] homeowners planning to list their homes for sale in March.”
Redfin chief economist Nela Richardson warned that housing inventory levels are “still not nearly high enough to meet stronger buyer demand,” but added, “We do expect new listings to pick up in April and May.” Redfin’s index is adjusted for the company’s market share growth. A measure of 100 represents the historical average for the three-year period from January 2013 to December 2015. March 2018 measured 105, indicating that demand is still higher now than it was during that benchmark period.
Investor Insight: There are exceptions to every rule, including that Spring is the “hot” season for home sales. The important thing is to understand what causes these exceptions.
The bigger issue, many real estate professionals believe, is not that there is less demand for housing but that there is less housing available to meet demand. Year-over-year, March posted 13.6 percent fewer homes in the housing inventory supply and 7.3 percent fewer homes were newly listed in March than during the year prior. In Freddie Mac’s recently published April Outlook report, although “the broader economic environment remains favorable for home sales…without new-home construction and increased housing supply, home sales in the U.S. will have a hard time growing from current levels.” Len Kiefer, Freddie Mac’s deputy chief economist, predicted “modest growth this year and the next.”
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