Redfin’s Housing Demand Index which measures and forecasts based on homebuyer activity prior to purchase, decreased 5% in July, falling to 108 from 113 in June, the fourth consecutive month-over-month decline.

Redfin real estate agents report that the market is rapidly cooling, with buyers reaching their limit on prices and showing less interest in hot home listings.

In Denver, where half of new listings sell in six days or less, Redfin agents and their customers are seeing the slowdown first hand.

“It feels like the market is at a standstill,” Redfin agent Michelle Ackerman said. "Showings have dropped off significantly.”

According to Redfin, Ackerman recently put a home on the market for less than $300,000 in one of the city’s top-rated school districts. She expected 30 showings in the first weekend and three offers. She got nine showings and one offer.

Still, homebuyer demand was up 9% year-over-year in July, leading Redfin’s Forecast Model, which Redifin claims is the industry’s earliest forecast of U.S. home values and sales, to project that in August, home prices across 15 major metro areas will rise 2.2% and sales to increase 2.6% year-over-year.

The model forecasts that in September, prices will increase 5.3% and sales will rise by 10% from last year. Based on home price data from the first 24 days of August and the fact that September projections are so strong, Redfin analysts expect the actual home price growth for August to be a point or two higher than the 2.2% forecasted increase.

Using Redfin demand data through mid-July and housing metrics from 15 major metro areas, Redfin forecasted July home prices and sales on July 23.

In July, the median sale price increased 4.6% from a year earlier, compared to Redfin’s July 23 forecast of 4.3% growth. The Redfin sales forecast for July was also on target, with sales up 14% year-over-year against our forecast of 14.3%.