Homebuyer interest dipped slightly in November, but remains well above year-ago levels, according to Redfin.
The Redfin Housing Demand Index, which measures Redfin customers' requests for home tours and written offers was 127 in November, up more than 29% from a year ago, but down almost 6% from October 2017.
"Three years of low inventory is taking its toll on buyer demand in terms of tour and offer activity," Redfin chief economist Nela Richardson said in a press release.
The increase was particularly pronounced in the past year. During 2016, average index levels were much closer to the baseline. The index has a baseline reading of 100 that reflects the three-year average for demand from January 2013 and December 2015.
While demand has been very strong in 2017, seasonality and high home prices did start to put a little bit of damper on demand starting in the fall. Inventory constraints have also started to deter buyers.
"People still want to buy homes, especially before mortgage interest rates increase and prices rise even more. But there just aren't enough homes for sale, especially at lower- to mid-level prices," said Richardson.
Inventory in the 15 metropolitan areas covered by the demand index was down 18% year-over-year in November.
Contraction in year-over-year inventory rates has persisted for 30 months in a row in major markets, even though new listings were up slightly in November compared to the same month a year ago.