Fewer homebuyers enter bidding wars amid high mortgage rates: Redfin

Amid high mortgage rates, just 44.6% of home offers through Redfin received a competing offer in August, down from the same time last year, according to data from the real estate brokerage firm. (iStock)

Competition from homebuyers has fallen for the seventh consecutive month amid high mortgage rates, according to a report from Redfin.

In August, just 44.6% of the real estate brokerage firm’s home offers faced a competing offer, based on seasonally adjusted figures. This is down from 47.2% in July and 63.5% in August last year, according to Redfin.

August also saw the lowest rate of bidding wars since the coronavirus pandemic began in 2020, the data shows.

Redfin defined a bidding war as when a bid receives at least one competing bid. The average home in a bidding war in August received 3.2 bids. This is compared to 3.5 offers in July and 5 offers in August 2021, according to Redfin.

If you’re looking to buy a home or refinance your current mortgage, you can visit Credible to compare multiple mortgage lenders and find the best rate for you.

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Why fewer buyers are entering bidding wars

Rising mortgage rates are a major reason potential buyers are abandoning the market, Redfin reported.

Mortgage rates are significantly higher than they were at the same time last year, the average 30-year fixed rate mortgage exceeding 6% for the first time in 14 years in September.

Many potential buyers decided not to make an offer because they couldn’t afford the monthly payments required for a mortgage rate of 6% or more, Redfin said.

And while August house prices fell Due to higher mortgage rates, prices were still up 14.1% from a year ago, according to a report from Zillow.

Potential buyers are also abandoning the market for several other reasons, including inflation and concerns about declining home values, Redfin reported.

If you’re considering buying a home in today’s market, consider using Credible to learn more about mortgage rates and see what your options are.

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Selling your home in today’s market

Despite higher mortgage rates, there are still some positive features for buyers in today’s housing market, including less competition and slightly lower home prices.

Home values ​​fell 0.3% from July to August, the biggest monthly drop since 2011, according to The Zillow report.

Sam Chute, a Miami-based Redfin listing agent, suggested that as long as they’re realistic, sellers will still be able to get a fair price on their homes.

“The worst thing a seller can do right now is overprice their home, and the best thing they can do is price just below market value to generate interest. buyers,” Chute said. “Ingenious sellers understand that the market is closely tied to rising mortgage rates. Buyers are not going to pay exorbitant sums or forgo contingencies like they did last year, but they will pay a fair price for a beautiful house.”

To make sure you get the best mortgage rate, you can check out the Credible Marketplace to easily compare multiple rates and lenders and find the right option for you.

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