US housing shortage sparks uptick in bidding wars
Competition for limited inventory is climbing as state economies reopen
As more Americans jump back into the housing market, competition for limited inventory is increasing among prospective homebuyers.
Many major cities around the U.S. experienced an uptick in interest, creating bidding wars for available properties, according to real estate brokerage firm Redfin. Nearly 50 percent of Redfin offers faced competition in May, up from 43.9 percent in April.
Meanwhile, the number of listings on the market was 18.9 percent lower than the same period last year.
"Bidding wars also jumped in May because homebuyers felt they were starting to get more clarity around where the economy was headed, with cities around the nation lifting stay-at-home orders,” Redfin lead economist Taylor Marr said in a statement. “This gave house hunters more confidence to compete.”
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Single-family homes were more likely to have multiple competitive offers when compared with condos and townhouses. As previously reported by FOX Business, the pandemic has caused prospective buyers to value space and private property more than they may have in the past.
Homes priced below $500,000 are in the highest demand, Redfin agents said.
The metro area that experienced the highest amount of competition was Boston, followed by Dallas and Washington, D.C.
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Recently, there have been some other positive signs in the housing market.
As previously reported by FOX Business, the rate at which people are putting their mortgage payments on pause has declined for eight consecutive weeks.
Other data even shows that the amount of Americans with forbearance plans has actually begun to decline.
There could be more positive news on the horizon for the housing market, as the U.S. economy added a shocking 2.5 million nonfarm payroll positions in May and the unemployment rate fell. Wall Street had expected a loss of millions of additional positions as well as an uptick in the read on unemployment.