Demand for homes continues to escalate, as measured by the January Redfin Housing Demand Index, which has increased nearly 23 percent from a year ago and is up 6.5 percent versus December.

The index reached 130, the highest level since Redfin began tracking home demand in January 2013.

Redfin said the growth is due in part to a 25.9 percent jump from a year earlier in homebuyers requesting tours, and an 18 percent increase in the number of buyers making offers.

However, inventory remains tight in many markets due, in part, to lot and labor shortages, and this is preventing buying activity from taking off, Redfin said.

Home prices hit a 30-month high in December, up 5.8 percent from a year ago, and are 0.5 percent off the previous market peak in July 2006.