U.S. bidding wars dropped 2.6 percentage points between July and Aug.

SEATTLE – Nationwide, 44.6% of home offers written by Redfin agents faced competition in August, the lowest bidding-war rate since the beginning of the pandemic when the housing market nearly ground to a halt, according to a new report from Redfin.

Year-to-year, U.S. bidding wars are down 63.5% a year earlier, and a revised rate of 47.2% in July marks the seventh-straight monthly decline.

The typical home in a U.S. bidding war received 3.2 offers in August compared with 3.5 offers one month earlier and 5 offers one year earlier, according to the study.

Some buyers are dropping out of the market because mortgage rates have doubled year-to-year, reaching 6.29% in Freddie Mac’s latest weekly study. 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 mortgage rates, up from under $2,000 with last year’s rates.

To be included in this analysis, metros must have had a monthly average of at least 50 offers submitted by Redfin agents from March 2021 to March 2022.

Townhomes likely face competition, condos less so

Offers for townhouses were more likely than other property types to encounter competition, with 44.1% of Redfin offers facing bidding wars. They were followed by single-family homes (42.1%), multi-family properties (40.2%) and condos (37%).

Townhouses are popular in today’s pricey housing market because they’re typically smaller and more affordable than single-family homes.

 

 

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