More than half of the U.S. homes in the market faced bidding wars in August and reached this level for the fourth straight month, according to Redfin.
Due to the extremely tight housing stock, which contributed to an increase in buyer demand, 54.5% of the properties experienced bidding wars in August, with some metropolitan areas reaching a high of over 65%. This percentage decreased from the revised interest rate of 57.3% in July, but increased five times over the previous year's value.
The country's greatest competition was in the housing markets along the west coast. Bidding wars were fought on 65.2% of the homes for sale in the San Francisco-San Jose area and Salt Lake City. Followed by stocks of 64.5% in San Diego, 63.5% in Washington, DC, and 62.2% in Seattle.
"The market is on fire. There is just not enough in the market to meet the huge demand for homes," said Lisa Padilla, a Redfin agent in San Diego, in a press release. "Many military buyers try to take advantage of the low interest rates on VA loans. Anything for sale for less than $ 600,000 has multiple offers, and sometimes they get more than 20 offers."
As more home buyers – millennials in particular, now the largest group of buyers – flood the market to keep falling mortgage rates, this higher affordability has been offset by rising prices. With the supply crisis, home buyers are looking inland to find a home within their budget.
"The pandemic-induced trend of people moving from crowded cities to more affordable and spacious areas is making homes in places like Sacramento and Phoenix almost as competitive as they are in the Bay Area," said Redfin chief economist Daryl Fairweather. "Low mortgage rates are motivating homebuyers who are thinking of doing so. I expect competition will continue to increase in more affordable parts of the country."