Home-buying demand continues to increase even as interest rates rise and the housing inventory shrinks, according to a report from Redfin.
The Redfin Housing Demand Index rose 15.1% month over month in December to a seasonally adjusted level of 124. This represents the highest level since Redfin began the index in January 2013.
Year over year, homebuyer demand soared 26.3%, Redfin said Tuesday. Driving the high demand was a 36.4% year-over-year uptick in homebuyers requesting tours and a 10.2% rise in homebuyers making offers.
At the same time, the number of homes for sales dropped 12.6% year over year and 17.1% month over month.
New listings often drive interest in home buying, and Redfin Chief Economist Nela Richardson said that more could be expected on the horizon.
"In December, we started seeing homes that spent time on the market, perhaps because they were not in the hottest neighborhood or needed renovation, finally get offers," Richardson said. "Based on the number of sellers who've contacted Redfin this month, we expect a sizeable increase in new listings in the next two months."
"With new listings on the way and this year's buyers willing to take a look at older inventory, we anticipate that sales in early 2017 will be strong," she added.
