Homebuyer Demand Softened by Rising Rates

SEATTLE-Redfin‘s recent Real-Time Demand Pulse, which analyzes home tour and offer data, showed that the number of Redfin customers touring homes and making offers dipped in both May and June this year, falling more than they did during same period last year. According to the firm, the most likely reason for the decrease in demand is a sudden spike in interest rates in June.

Redfin is seeing two kinds of reactions among homebuyers. The first group consists of homebuyers just getting started in the process of purchasing a home. This group seemed to step back, which accounts for the decline in tours and offers in the first few weeks of June, says Redfin. The second group of buyers, already further along in the homebuying process, tended to accelerate in an effort to lock in a still historically low rate. As a result, offers were up by 1.2% in the final week of June.