As 2013 came to a close, homebuyer demand fell more sharply than the year before. From November to December 2013, the number of Redfin customers taking tours and signing offers fell 14.8 percent and 20.2 percent, respectively. In comparison, tours declined 7.1 percent and offers dropped 16.7 percent in December 2012.

Homebuyer demand took a sharper-than-expected drop in December. While some decline is normal during the holiday season, Redfin reports that the worsening shortage of homes contributed to steep drops in home tour requests and signed offers made by Redfin customers.

While it is normal for homebuyer activity to fall during the holiday season, the worsening shortage of homes for sale in December was likely a key factor in the sharper-than-expected drop in demand. Across Redfin’s 22 markets, the number of new homes listed for sale dropped 27 percent from November to December, compared to 24 percent in 2012 and 19 percent in 2011.

Meanwhile, rising mortgage rates are causing an increased sense of urgency among budget-conscious homebuyers. In December, the Federal Reserve’s decision to start scaling back its stimulus program led average 30-year fixed mortgage rates to inch up to 4.46 percent from 4.26 percent in November.

“Homebuyer anxiety is starting to rise. My clients who were determined to find a home before year-end instead found few homes worth touring in December,” said Redfin agent Wayne Olson in Oregon. “Now, with mortgage rates rising, they are increasingly concerned about their budget. They’re also nervous about facing stiff competition in the coming months as more buyers enter the market.”

The report, which covers 22 top U.S. real estate markets, showed:

• Redfin customers scheduling home tours fell 14.8% month over month in December 2013, compared to a drop of 7.1% during the same period in 2012.
• Offers signed by Redfin customers dropped 20.2% between November and December 2013, compared to a 16.7% drop during the same period last year.
• Meanwhile, rising mortgage rates are causing an increased sense of urgency among budget-conscious homebuyers. In December, the Federal Reserve’s decision to start scaling back its stimulus program led average 30-year fixed mortgage rates to inch up to 4.46 percent from 4.26 percent in November.