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Nationwide, 57.8% of home offers written by Redfin agents faced competition on a seasonally adjusted basis in May, the lowest level since February 2021, the technology-powered real estate brokerage said.
Redfin's report, based on data submitted by its agents, showed May’s rate was down from a revised rate of 60.9% in April, and from the pandemic peak of 68.8% in May 2021, Redfin said. It marks the fourth-consecutive monthly decline.
The typical home in a bidding war received 5.3 offers in May, down from 6.8 in April and 7.4 in May 2021, Redfin said.
Homebuyer competition is cooling because rising mortgage rates and surging home prices have made buying less feasible for many Americans, the company said.
The typical monthly mortgage payment for a homebuyer is now $2,514 at the current 5.78% mortgage rate. That’s up 49% from a year earlier, when mortgage rates were 2.93%. Redfin economists say they expect the bidding-war rate to fall below 50% by the end of the year.
“Homes are now getting one to three offers, compared with five to 10 two months ago and as many as 25 to 30 six months ago,” said Jennifer Bowers, a Redfin real estate agent in Nashville. “Offers also aren’t coming in as high above the list price as before.”
Bowers said she recently listed a three-bedroom, three-bathroom home “in a super cute neighborhood for $399,900. It ended up going under contract for $12,000 above the list price with an inspection, whereas three months ago, the buyer probably would have paid $60,000 over asking and waived the inspection.”
U.S. Metro Data
In Providence, R.I., 45.3% of home offers written by Redfin agents faced competition in May, down from 82.7% a year earlier. That 37.4-percentage-point decline was the largest among the 36 U.S. metropolitan areas in Redfin’s analysis.
Next were Riverside, Calif. (41% vs. 73.7%; -32.6 ppts), Raleigh, N.C. (52.2% vs. 82.9%; -30.7 ppts), San Francisco (57.7% vs. 78.2%; -20.5 ppts) and Orlando, Fla. (51% vs. 71%; -20 ppts).
Competition increased on a year-over-year basis in just three of the 36 markets Redfin analyzed. In Las Vegas, 74.5% of home offers written by Redfin agents faced competition in May, up from 65.4% in May 2021 (+9.1 ppts). That was followed by Worcester, Mass. (81.8% vs. 77.3%; +4.5 ppts) and Miami (63.2% vs. 62.1%; +1.1 ppts).
In addition to seeing the largest year-over-year declines in competition, Riverside and Providence had the lowest overall bidding-war rates, at 41% and 45.3%, respectively. Next came Olympia, Wash., where 47.2% of home offers written by Redfin agents encountered competition in May. Rounding out the bottom five were Honolulu (47.8%) and Minneapolis (48.7%).
Worcester had the highest bidding-war rate, at 81.8%, followed by Las Vegas (74.5%), Boston (72.6%), Dallas (72.3%), and Philadelphia (69.3%).
Competition By Property Type
Townhouses were more likely than any other property type to encounter competition, with 64.6% of Redfin offers facing bidding wars in May. That was followed by single-family homes (61.6%), multi-family properties (58.2%), and condos/co-ops (54.7%).
Some homebuyers have sought out townhouses because they’ve been priced out of the market for single-family homes. The typical home that went under contract in March was 1,720 square feet, down 1.8% from 1,751 square feet a year earlier, a recent Redfin analysis found.