September 30, 2022

Home buying competition drops to its lowest level in two years

Home buying competition drops to its lowest level in two years

The competition for housing Across the country it is falling to levels not seen since the early days of the coronavirus pandemic, according to a recent Redfin report.

In July, 44.3% of home offers from Redfin agents faced competition nationwide, down from 50.9% in June and 63.8% last July, according to a real estate brokerage.

The typical home last month saw 3.5 deals — down from 4.1 deals in June and 5.3 deals last July, according to the data.

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July was the sixth month in a row that the bidding wars had abated. Redfin reported Friday that it also had the lowest share of all-competitive home offerings except for April 2020, “when the onset of the coronavirus brought the housing market almost to a halt.”

A picture of the yard of Redfin Real Estate in front of a home for sale on October 31, 2017 in Seattle, Washington. (Photo by Stephen Brashear/Getty Images for Redfin/Getty Images)

An increasing number of potential buyers are being priced out of the market due to high inflation and mortgage rates uncomfortably.

according to Mortgage Buyer Freddie Mac, The average 30-year fixed-rate mortgage rate was 5.22% as of Thursday. This is higher than last week when it averaged 4.99%. A year ago, the 30-year fixed rate mortgage was 2.87%.

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Real estate sits in the market longer and the housing shortage is waning, giving buyers who haven’t opted out of the market more options and room to negotiate, according to Redfin.

Redfin

Sign a Redfin tech-driven realtor on a home for sale in San Ramon, California, September 17, 2019. (Photo by Smith Collection/Gado/Getty Images/Getty Images)

As a result, sellers lower their asking prices. Every week, about 8% of the listings on the market have decreased in asking price, It is the highest share on record, according to the brokerage.

Overall, Phoenix had the lowest bidding war rate as it faced just over a quarter of competing home bids in July.

Riverside, California was not far behind as it faces 31% of competing home offers. Seattle received 31.5% of the home bids facing competition, while Austin, Texas and Nashville, Tennessee got 31.7% and 33.3% of the home bids facing competition, respectively.

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“Many of these areas have attracted dozens of out-of-town homebuyers during the pandemic, driving up prices and making them too expensive for some home hunters — one reason they are now enjoying relatively low prices in the bidding war,” the brokerage said.

Meanwhile, Raleigh, North Carolina, has the highest rate in the bidding war with 63.8% of homes facing competition.

Homepage

A man walks past the signs of an open house in front of condominiums for sale in Santa Monica, California, October 17, 2010. (Reuters/Lucy Nicholson/Reuters Photo)

About 63% of homes in Honolulu also faced competition followed by 60.5% of homes in Providence, Rhode Island.

Philadelphia, Pennsylvania, and Worcester, Massachusetts, came next with 60.4% and 54.8% of homes facing competition, respectively, according to the brokerage.