Competition for housing across the country is slowing to levels not seen since the early days of the coronavirus pandemic, according to a recent Redfin report.
In July, 44.3% of home listings from Redfin agents faced competition nationwide, down from 50.9% in June and 63.8% last July, according to one realtor.
The typical home last month saw 3.5 offers – down from 4.1 offers in June and 5.3 offers last July, according to the data.
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July marked the sixth consecutive month that the bidding wars subsided. It also had the lowest share of housing offers facing competition on record, except for April 2020, “when the outbreak of the coronavirus brought the housing market to a near standstill,”[ads1]; Redfin reported Friday.
An increasing number of potential buyers are being priced out of the market due to uncomfortably high inflation and mortgage interest rates.
According to mortgage buyer Freddie Mac, the 30-year fixed mortgage rate averaged 5.22% as of Thursday. That’s up from last week when it averaged 4.99%. A year ago, the fixed 30-year mortgage rate averaged 2.87%.
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Properties are on the market longer and the housing shortage is easing, giving buyers who haven’t pulled out of the market more options and room to negotiate, according to Redfin.
As a result, sellers lower their asking prices. Each week, around 8% of listings on the market have fallen in asking price, which is the highest proportion ever, according to the brokerage house.
Overall, Phoenix had the lowest bidding war price with just over a quarter of home listings facing competition in July.
Riverside, California was not far behind with 31% of home listings facing competition. Seattle had 31.5% of home listings that faced competition, while Austin, Texas and Nashville, Tennessee had 31.7% and 33.3% of home listings that met competition, respectively.
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“Many of these areas attracted many out-of-town homebuyers during the pandemic, pushing up prices and making them prohibitively expensive for some house hunters — one reason they now have relatively low bidding war prices,” the brokerage said.
Meanwhile, Raleigh, North Carolina had the highest bidding war rate with 63.8% of homes facing competition.
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.