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At the start of this year for every home offer a Redfin agent wrote that faced no competing bids, twice as many found themselves embroiled in a bidding war.
Since then that ratio has plummeted to one-to-one.
In the month of June, just under 50 percent of home offers written by its agents faced competition on a seasonally-adjusted basis, the Seattle-based brokerage reported Wednesday.
Competition for homes has faced a steep decline from January’s 70 percent bidding-war rate and one that appears to have begun accelerating further over the last month, Redfin’s latest report suggests.
The reduction in contested home offers coincides with a period of steep mortgage rate hikes and a broad ongoing slowdown in real estate sales.
“Showings have dramatically decreased,” Redfin real estate agent Jenny Dedrick said in the report. “Homes that would’ve had 20 showings two months ago are now getting one or even none.”
In May, the seasonally adjusted bidding-war rate was just above 57 percent. The seven-point drop from May to June was the fastest competition has eased in a single month since the start of the pandemic. It was also the fifth consecutive month of decline in bidding-war rates.
As buyers and sellers have adjusted to the rapidly changing conditions, the brokerage has also observed a rise in cancellations.
Nearly 15 percent of buyers backed out of their home-purchase agreements in June — the second-highest levels recorded since at least 2017, according to Redfin’s report. Only in the first two months of the pandemic did buyers cancel a higher share of purchase contracts.
Over the past year a new homebuyer’s typical monthly mortgage payment rose 44 percent, undermining the general affordability of homes in virtually every U.S. market.
But for cash buyers and others who can still afford these prices at the current mortgage rates, the homebuying experience may be less hectic.
“While the market is cooling, it’s not coming to a crashing halt,” Shoshana Godwin, a Seattle Redfin agent, said in the report. “House hunters who can still afford to buy should consider taking advantage of the slowdown given that there’s way less competition.”
For the brokerage’s buyers in Riverside, California, navigating the home market these days may feel like being in a different world.
A mere 32 percent of Redfin home offers in Riverside faced at least one competing offer in June. The same time last year that share was as high as 71 percent.
The easing of competition was nearly as dramatic in the North Carolina population hubs of Raleigh and Charlotte, as well as the cities of Seattle and Honolulu. Each of these markets saw bidding-war rates drop by at least 30 percentage points.