Housing demand across 15 major U.S. metro areas fell more annually in June than at any other point over the last two years, according to Redfin’s housing demand index, released Wednesday.
The index was 9.6% lower in June 2018 than it was in June 2017, the largest annual decline since April 2016.
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The decline was driven by a 6.1% fall in the number of people requesting home tours and a 15% decline in offers made on homes, the largest year-over-year decline since April 2016 for this metric, too, the report said.
On a monthly basis demand fell 0.7%.
In some housing markets, slowing demand can be attributed to rising inventory giving buyers the opportunity to be more selective in their purchases.
The metro areas of Seattle and Washington, D.C., posted double-digit yearly inventory increases in June, but in the same time frame demand fell 14.8% and 14%, respectively. Demand also fell 3.4% and 3.7%, respectively, between May and June, according to the report.
Portland, Oregon, also experienced double-digit inventory increases as homebuyer demand remained flat month over month, but increased 12.3% yearly.
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"As much-needed large inventory increases finally arrive in some of the hottest markets, buyers are taking the opportunity to be choosy, offering only on well-priced homes," said Pete Ziemkiewicz, head of analytics at Redfin, in the report. "With more homes to go around, buyers don't need to bid as aggressively to win bidding wars, so prices, while still growing, are growing at a lower rate, and home sales are slowing."
"These cooling trends are concentrated in the markets that became the most uncomfortably hot over the past few years, so it's too soon to tell whether this is the start of a broader cooling or simply a return to something more like balance in places that had become extreme seller's markets," Mr. Ziemkiewicz said.
However, in some markets, like Chicago and Atlanta, buyer demand is increasing as supply shrinks.
In those cities, homebuyer demand increased by 4.3% and 1.7%, respectively, month over month in June, while inventory declined year over year.