What Buyer Activity Tells Us About the Housing Market

Despite the housing market being less frenzied than a year ago, potential buyers are still expressing their desire to purchase a home, as reported by U.S. News:

“Housing markets have cooled slightly, but demand hasn’t disappeared, and in many places remains strong largely due to the shortage of homes on the market.”

The latest Showing Time Showing Index, which measures the number of buyers actively visiting homes currently on the market, demonstrates this heightened activity (refer to the graph below):

The increase in showings by 62% from December to January is among the largest ever recorded. Furthermore, January had the highest number of showings since May of the previous year, as depicted in the graph. While it’s typical for showings to rise at the start of the year, January’s surge was more significant than usual, largely attributable to mortgage rates. Michael Lane, who holds the position of Vice President of Sales and Industry at ShowingTime+ explains:

“It’s typical to see a seasonal increase in home showings in January as buyers get ready for the spring market, but a larger increase than any January before after last year’s rapid cooldown is significant. Mortgage rate activity this spring will play a big role in sales activity, but January’s home showings are a positive sign that buyers are getting back out there . . .”

It’s worth emphasizing that mortgage rates were around the low 6% range in January, contributing to the significant number of showings during that month. This suggests that when mortgage rates become more favorable, buyer interest increases. The substantial surge in home showings early this year indicates that despite the current volatility of mortgage rates , there is a pool of potential buyers who are eager to make a move when the rates are in their favor.