Reaching a historic new low, only 10.4% of offers on homes written by Redfin agents in August faced a bidding war. Last month, that number was 11.4%. Last year, that number was at 42%.
August's total is the lowest bidding war rate on record since 2011, according to Redfin.
“Despite remaining near three-year lows, mortgage rates have failed to bring enough buyers to the market to rev up competition for homes this summer,” said Redfin Chief Economist Daryl Fairweather.
The national bidding war rate reached a high in March 2018 of 59%. This number began to drop as homebuyers faced higher prices of homes and rising mortgage rates, Redfin said.
The most competitive market in August was San Francisco, with 31% of offers written facing a bidding war, down 0.8% from July. This time last year, 73.5% of offers faced bidding wars in San Francisco.
The market that follows San Francisco with the second highest bidding rate is San Diego, which saw a bidding war rate at 18.4%, down from July’s 21.4%. In August 2018, 48.6% of homes went to a bidding war.
Atlanta, Georgia has the lowest bidding rate, sitting at 2.4% in August. The month prior, 7.4% of homes went to a bidding war. In August 2018, 33.9% of homes saw a bidding war.
“Recession fears have been enough to spook some would-be buyers from making the big financial commitment of a home purchase,” Fairweather said. “But assuming a recession doesn’t arrive this fall or winter, consumers will likely adjust to the new ‘normal’ of continued volatility in the stock and global markets, and the people who need and want to make a move will take advantage of low mortgage rates. As a result, I still expect homebuying competition to pick back up in the new year."
