Housing Market Continues to Cool as Mortgage Rates Move Higher

Redfin, the Seattle-based technology-powered real estate broker, is reporting that the Redfin Homebuyer Demand Index (HDI)—a measure of requests for home tours and other home-buying services from Redfin agents—has fallen below 2020 levels for the first time this year, down -1% year-over-year in the week ending June 20th, 2021. Redfin notes that the Mortgage Bankers Association home purchase index has declined -11% since the week ending March 24. As a result of declining sales, the active supply of homes for sale has crept up 5% from the 2021 low in mid-March. However, home prices are still rising, homes are selling in fewer days than ever, and more homes than ever are selling above list price. In a statement prepared for the release of the HDI, Redfin’s Chief Economist, Daryl Fairweather said, “Some homebuyers are pausing or abandoning their plans to buy because homes in their area have gotten too expensive. Even though there are no signs of prices coming down, homebuyers may face a bit less competition and have a bit more selection of homes this summer than they did earlier this year. All year we’ve heard stories about homeowners being reluctant to sell because they don’t want to face such a tough market as a buyer. As the housing market cools slightly, we may see more homeowners finally decide to cash out and move. And as the economy continues to reopen and employers clarify their work-from-home policies, more homeowners may decide that a move is in order.”