U.S. Housing Demand Dipped in February

Housing demand dipped in February from the previous month, as limited inventory dampened some buyers’ enthusiasm, according to a report released by Redfin on Tuesday.

The Redfin Housing Demand Index recorded a seasonally adjusted level of 118 in February, dropping 8.5% from January, when when the housing demand index reached an all-time high at 128.

Despite the dip, it was still the highest level for the month of February since the Seattle-based national brokerage began compiling the index since 2013.

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The index is based on surveys of thousands of customers requesting home tours and making offers. A reading of 100 represents the historical average for the three-year period from January 2013 to December 2015.

"Limited inventory, particularly for starter homes, has put a crimp in the 2017 market," said Nela Richardson, Redfin’s chief economist, in the report. "We expect to see more listings hit the market this spring, but there will still not be enough inventory to match homebuyer demand."

Compared with last February, there were 7.2% fewer new listings coming onto the market and 13.9% fewer homes overall, according to Redfin.

In terms of regional markets, Boston, Denver and Seattle continued to be the strongest.

The Denver-area Demand Index hit 166 in February, representing an 100.4% increase from the same period last year, while the number of homes for sale was at the lowest level in over 30 years, according to Corey Keach, a Redfin agent in Denver.

"Homes in higher price points are also seeing strong competition, and even some $1 million and $2 million dollar homes in Boulder are seeing multiple offers. Competition at that price point used to be rare here, which shows just how hot the market is," Mr. Keach said in the report.