Market Overview

Homebuyer Demand Flat in September as Inventory Shrinks; Redfin Forecasts Slowing Price Growth


Redfin (, the next-generation real estate brokerage, today announced that the Redfin Housing Demand Index increased 0.3 percent to 93 in September 2015 from 92 a year earlier, the smallest annual increase so far this year.

The Redfin Housing Demand Index is the industry's first and only measure of homebuyer activity prior to purchase, and is based on millions of visits to home-listing pages and thousands of Redfin customers requesting tours and writing offers in 15 major metro areas.

In September, the number of Redfin customers writing offers was up 10 percent from last year for the second month in a row. Meanwhile, growth in the number of customers requesting home tours slowed to 23 percent from 31 percent in August. That's a change from the summer when Redfin reported that more people were touring homes but fewer were making offers.

This change suggests that homebuyers are still out there, but they're frustrated by a lack of choice and high prices. Although new listings are up 5.1 percent from last year, the overall inventory of homes for sale is down 2.8 percent. The typical home in October sells a week faster than it did a year ago.

October and November Forecasts

Redfin's forecast model, the industry's earliest forecast of U.S. home values and sales across 15 major metro areas, shows a 4.5 percent increase in prices year over year and a 7.3 percent rise in sales in October.

Redfin projects that in November home prices will rise 4.3 percent and sales will advance 8.3 percent.

Looking Ahead

The key question is how long new listings will continue to drive sales. The bear case is that the combination of woefully low inventory and high prices could take its toll on buyers and cause sales to shrink.

The bull case is that sellers are in the best position they've been in years to make a move, be it trading up, downsizing or cashing out. At $12.1 trillion, U.S. home equity is at the highest level since 2006. Today's rock bottom mortgage rates can help keep monthly payments within an affordable range for sellers who want to trade up. There's also evidence that loans are becoming easier to come by, which could boost sales at year-end.

"We're bullish on sales for the remainder of 2015," says Nela Richardson, Redfin chief economist. "Though we think buyers have had enough of over-the-top pricing."

September Forecast Check-In

In September, the median sale price in the 15 metros that compose the Demand Index increased 4.8 percent from a year earlier. Redfin forecasted for 5.3 percent growth. September sales were up 10.5 percent year over year against the forecast of 10 percent.

To read the full report, complete with data, charts, insights and a full methodology, click or paste the following link:

Redfin Forecast Models

The price model includes:

  1. Visits to home listing pages
  2. Number of Redfin customers requesting home tours
  3. Number of Redfin customers making offers on homes
  4. Median price of pending sales
  5. Median price of new listings
  6. Median price per square foot of pending sales
  7. Median sale price

The sales model includes:

  1. Visits to home listing pages
  2. Number of Redfin customers requesting home tours
  3. Number of Redfin customers making offers on homes
  4. Number of homes for sale
  5. Number of homes sold
  6. Number of new listings
  7. Number of properties that went under contract in the previous 30 days

About the Redfin Housing Demand Index: The Redfin Housing Demand Index is the industry's first and only measure of housing activity prior to purchase. It is scaled to equal 100 on January 2013, which is the first month of the estimation period. The Demand Index is adjusted for Redfin's market share growth. This homebuyer activity is used to forecast median sales prices and sales volume two months in the future, which is 30 to 60 days before final closings are tabulated and property transfers are entered into public records.

The Redfin Housing Demand Index is published on the last Tuesday of each month at 8 a.m. Eastern time. Redfin is the only major brokerage to track virtually all of its key customer events in one database.

Currently, price forecasts have a median error of 1.4 percentage points. Homes sold forecasts have a median error of 3.1 percent points. Redfin will continue to improve the accuracy of its price and sales forecast models over time. While the Demand Index currently tracks 15 top metros, Redfin serves more than 80 markets across the U.S. with its own real estate agents.

The Redfin Housing Demand Index covers the following 15 metro-area markets: Atlanta, GA; Austin, TX; Baltimore, MD; Boston, MA; Chicago, IL; Denver, CO; Los Angeles, CA; Oakland, CA; Orange County, CA; Phoenix, AZ; Portland, OR; San Diego, CA; San Francisco, CA; Seattle, WA; Washington, DC.

Connect with Redfin
Download the Redfin mobile app

About Redfin

Redfin ( is a next-generation real estate brokerage that represents people buying and selling homes. Founded by technologists, Redfin employs a team of experienced, full-service real estate agents who are advocates, not salespeople, earning customer-satisfaction bonuses, not just commissions. features all the broker-listed homes for sale, as well as for-sale-by-owner properties that don't pay brokers a commission. Redfin also offers online tools, built by its own software engineers, that make the entire process of buying or selling a home easier and more fun. The company serves major markets across the U.S. and has closed nearly $20 billion in home sales. In 2012, Redfin was named one of The DIGITAL 100: World's Most Valuable Private Tech Companies by Business Insider.

Redfin Journalist Services:
Rachel Musiker, 206-588-6863

View Comments and Join the Discussion!