Homebuyer competition fell for the seventh straight month amid high mortgage rates, according to a report by Redfin.
In August, only 44.6% of the real estate agency’s seasonally adjusted listings faced a competing bid. That’s down from 47.2% in July and 63.5% in August last year. to Redfin.
August also had the lowest rate of bidding wars since the coronavirus pandemic began in 2020, the data showed.
Redfin defined a bidding war as when a bid receives at least one competing bid. The average house in an August bidding war received 3.2 offers. That compares 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 interest rate for you.
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Why fewer homebuyers are getting into bidding wars
Rising mortgage rates are one of the top reasons prospective homebuyers are exiting the market, Redfin reported.
Mortgage interest rates are significantly higher than at the same time last year for the average 30-year fixed-rate mortgage over 6% for the first time in 14 years in September.
Many potential buyers chose not to bid because they couldn’t afford the monthly payments required for a mortgage rate of 6% or more, Redfin said.
And while House prices fell in August Prices were still up 14.1% year over year due to higher mortgage rates, according to a report by Zillow.
Potential buyers are also exiting the market for several other reasons, including inflation and concerns that property values will fall, Redfin reported.
If you’re thinking about buying a home in the current market, use Credible to learn more about mortgage rates and see what your options are.
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Sell your house on the current market
Despite higher mortgage rates, there are still some positive features for buyers in the current housing market, including less competition and slightly lower home prices.
Property values fell 0.3% in July-August, the largest monthly decline since 2011 Zillow’s report.
Sam Chute, a Redfin listing agent based in Miami, suggested that as long as sellers are realistic, they will still be able to get a fair price for their homes.
“The worst thing a seller can do right now is to oversell their house and the best they can do is ask for a price just below market value to attract buyers’ interest,” said Chute. “Resource rich sellers understand that the market is intertwined with rising mortgage rates. Buyers will not pay extreme sums of money or forego contingencies like last year, but they will pay a fair price for a beautiful home.”
To make sure you’re getting the best mortgage rate, you can visit Credible’s marketplace to easily compare multiple interest rates and lenders to find the right option for you.
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