Competition for homes across the nation is easing to levels not seen since the early days of the coronavirus pandemic, according to a recent Redfin report.
In July, 44.3% of home offers from Redfin agents faced competition nationwide, down from 50.9% in June and 63.8% last July, according to a real estate brokerage.
The typical home last month saw 3.5 offers – down from 4.1 offers in June and 5.3 offers last July, according to the data.
July marked the sixth consecutive month that bidding wars eased. It also had the lowest share of home offers facing competition on record except for April 2020, "when the onset of the coronavirus brought the housing market to a near standstill," Redfin reported Friday.
An increasing number of potential buyers are getting priced out of the market due to uncomfortably high inflation and mortgage rates.
According to mortgage buyer Freddie Mac, the 30-year fixed mortgage rate averaged 5.22% as of Thursday. That's up from last week when it averaged 4.99%. A year ago, the fixed 30-year mortgage rate averaged 2.87%.
Properties are sitting on the market longer and the housing shortage is easing, which is offering buyers who haven't backed out of the market more options and room to negotiate, according to Redfin.
As a result, sellers are dropping their asking prices. Each week, about 8% of listings on the market have dropped in asking price, which is the highest share on record, according to the brokerage.
Overall, Phoenix had the lowest bidding-war rate with just over one-quarter of home offers encountering competition in July.
Riverside, California, wasn't far behind with 31% of home offers facing competition. Seattle had 31.5% of home offers facing competition while Austin, Texas, and Nashville, Tennessee, had 31.7% and 33.3% home offers facing competition, respectively.
"Many of these areas attracted scores of out-of-town homebuyers during the pandemic, pushing up prices and rendering them prohibitively expensive for some house hunters—one reason they now have relatively low bidding-war rates," the brokerage said.
Meanwhile, Raleigh, North Carolina had the highest bidding-war rate with 63.8% of homes facing competition.
About 63% of homes in Honolulu also faced competition followed by 60.5% of homes in Providence, Rhode Island.
Philadelphia, Pennsylvania, and Worcester, Massachusetts, came next with 60.4% and 54.8% of homes facing competition, respectively, according to the brokerage.