For the second month in a row, more than half of Redfin offers for homes faced competition in June, the tech-powered real estate brokerage said. Nationwide, 53.7% of Redfin offers faced bidding wars last month, up from a revised rate of 51.8% in May and 44.4% in April.
The bidding-war rate is rising even as the coronavirus pandemic and the resulting shaky economy continue to spread across the country.
“Bidding wars continue to be fueled by historically low mortgage rates and fewer homes up for sale than almost any time in the last two decades,” said Redfin Economist Taylor Marr. “It’s like a game of musical chairs where only the best bidders get a seat. Both renters and move-up buyers who have held onto their jobs are vying for the small number of single-family homes on the market as they realize they need more space for their families.”
The average mortgage rate fell to 3.03% for the week ending July 9, the lowest 30-year fixed-rate number since Freddie Mac began tracking the statistic in 1971. The number of homes for sale nationwide in June was down 21.3% from the year before, bringing inventory down to its lowest level since at least 2012 on a seasonally adjusted basis. The number of new listings was down 12% year over year.
Single-family homes were most likely to be part of a bidding war in June, with 56.2% of Redfin offers facing competition, followed closely by townhouses (54.2%). By contrast, 40.5% of condos faced bidding wars. Single-family homes face a bigger supply constraint than townhouses or condos, with supply in June down 25% since the year before. That’s compared with a 10.7% year-over-year drop for townhouses and a 7% dip for condos.
With 72.4% of Redfin offers facing competition, Boston had the highest bidding-war rate of all the metros included in this analysis in June. Boston also topped the list in May, when 67.2% of offers were part of a bidding war. Next come San Diego and Salt Lake City, where 65.7% and 63.8% of offers faced competition, respectively. Miami, where 32.4% of offers faced competition, had the lowest bidding-war rate. It’s followed by Chicago (37.8%) and Las Vegas (39.2%).
