Redfin, the Seattle-based real estate brokerage firm, reported on Thursday (9-22-22) that 44.6% of home offers written by Redfin agents nationwide faced competition in August. This is the lowest bidding-war rate since the beginning of the pandemic when the housing market nearly came to a halt. Year-over-year the bidding-war rate is down 63.5%, and a revised rate of 47.2% in July marks the seventh-straight monthly decline.
According to data submitted by Redfin agents nationwide, the typical home in a bidding war received 3.2 offers in August, compared with 3.5 offers in July and 5 offers in August 2021.
As the housing market cools and buyers back off from the COVID-19 driven homebuying frenzy in 2021 and early 2022, the bidding-war rate is falling. Also, the number of homes sales is currently 20% lower year-over-year.
In the report, Redfin agents are saying that buyers are dropping out of the market and competition is dwindling largely because mortgage rates have doubled from a year ago, reaching 6% in mid-September. The increase in rates makes buying a home much more expensive: A buyer purchasing a $400,000 home has a monthly mortgage payment of roughly $2,500 with today’s 6% mortgage rate, up from under $2,000 with last year’s 3% rates.
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