Report: Nearly 6 out of 10 home buyers face bidding wars

Report: Nearly 6 out of 10 home buyers face bidding wars

Report: Nearly 6 out of 10 home buyers face bidding wars
Approximately 58 percent of home offers written by Redfin agents in August faced competition. While that figure may seem overwhelming, it is actually a record low for 2021. In July, it was 62.1 percent and 74.3 percent in April. The rate of competition illustrates the challenges buyers face when making an offer on a home and the chronic inventory shortage that has become a referendum on the U.S. housing market for the past several years. San Diego had a higher than average competition rate with 65.5 percent of offers facing bidding wars in August, down from 73.4 percent in July.

Competition is measured by the number of offers placed on a single property for sale, often for increasing amounts. These bidding wars are costly for home buyers and can inflate property values for nearby homes.

As a result, nearly half of the homes sold in the U.S. sold above their list price during the four weeks ending September 5. Industry experts are watching this data closely to see if the market is near or at the tipping point where buyers will simply back out rather than pay higher prices.

Today, conforming no-point 30-year fixed mortgage rates are averaging 2.75 percent and 15-year rates are near 2.00 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.