Prospective homebuyers gearing up to beat out the competition can start to breathe easier.
The level of competition on home offers written by Redfin agents dropped below 50 percent for the first time in more than two years, according to a report. The bidding war rate stood at 49.9 percent in June, the lowest Redfin has recorded since a 46.3 percent rate in May 2020.
The share of offers to receive at least one rival offer soared during the pandemic, as buyers competed for an increasingly moribund amount of available homes. Pandemic-era competition peaked in January, when the bidding war rate neared 70 percent.
Competition has plunged in recent months, however, as a concerning economic outlook and rising mortgage rates have led some to abandon their home search altogether, leaving more buyers free from bidding wars.
June’s nationwide bidding war rate was down from 57.3 percent in May and 65 percent in June 2021. It marked the fifth straight month of a rate decline.
The dropping bidding war rate is the latest sign of a slowing housing market. Redfin reported about 60,000 home purchase agreements were canceled last month, equivalent to roughly 14.9 percent of homes that went under contract in June. That’s the highest percentage of canceled contracts in the five-year history of Redfin’s metric, excluding the pandemic’s first two months.
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Battles were fiercest in the townhouse market, where 54.6 percent of offers faced bidding wars last month. That was followed by single-family homes (52.3 percent), condos and co-ops (47 percent) and multifamily properties (41.3 percent).
Of the 36 metros analyzed by Redfin — which required a monthly average of at least 50 offers from March 2021 to March 2022 — competition was highest in Providence, Rhode Island, which had a bidding war rate of 77.6 percent. It was one of two metros to see a rise in competition year over year, albeit a marginal one; the other market was Colorado Springs.
The biggest year-over-year drop in competition came in Riverside, California, which saw its bidding war rate decline by 38.6 percentage points. The other biggest decreases came in Raleigh, Charlotte, Seattle and Honolulu.
Three of those metros also ranked in the top five lowest bidding war rates in June. The leader was Tampa, Florida, where the bidding war rate was 28.9 percent — down from 54.2 percent the month prior and 58.8 percent in June 2021.