The Bright MLS | T3 Home Demand Index for the Washington area fell by nearly 17% in July, an indication that homebuyer demand is waning a bit. Although in the Moderate demand range, the Index had been in the High category since March, reflecting a surge in demand in the early part of the year that has since softened.

Demand among each of the six types of homes tracked by the Index decreased in July. The largest drop in buyer interest was in the higher-priced single-family segment. The supply of homes for sale in the single-family and townhouse segments remains quite low. The leanest supplies of homes were in the mid-priced single-family segment, at one month, and townhouses at 1.1 months.

Home demand in the Washington Metro area has been cooling since peaking in April with the July decline steeper than the previous two months. Notably, July was the first time in the past 12 months when the Index was below that of a year earlier. Lack of inventory and diminishing affordability contributed to the decline.

Expanded market insights are now available through Bright MLS T3 Home Demand Index. The Index has been expanded and restructured to more closely align with regional markets. In addition, updates have been made to the Washington, DC report to include additional counties.

With a lower number of closed and pending sales and demand dropping, buyers who left the market may want to consider resuming their search.