Seventy percent of home offers handled by Redfin agents faced bidding wars, up from 67.1 percent in December 2021 and 60 percent in January 2021, the highest rate since Redfin began tracking the data in April 2020.
January of 2022 is on record as the most competitive month ever for homebuyers, according to data released Wednesday from Redfin.
Seventy percent of home offers handled by Redfin agents faced bidding wars, up from 67.1 percent in December 2021 and 60 percent in January 2021, the highest rate since Redfin started tracking it in April 2020.
The report attributed the intense competition to buyers racing to close in advance of rising interest rates. January closed out with interest rates at 3.55 percent after ending December at 3.11 percent, while they now sit at over 4 percent. A year earlier, they sat at a record low of 2.65 percent.
Buyers are feeling pressure to close on deals before rates rise even further, but they’re being met by homeowners who feel no urgency to sell, knowing in many cases they, too, will face higher mortgage rates when they look for a new home, according to Redfin.
“Rising mortgage rates are intensifying an already-severe shortage of homes for sale because buyers are feeling more urgency to buy while homeowners are feeling less urgency to sell — an imbalance that’s fueling an increase in competition,” said Redfin Chief Economist Daryl Fairweather. “Buyers are battling it out for the few homes on the market in an effort to lock in relatively low payments before rates move even higher, but homeowners who bought or refinanced in the last year are staying put because they don’t want to lose their rock-bottom mortgage rate.”
The highest rates of bidding wars were seen in Spokane, Washington, a market once known for its affordability, where 83.3 percent of offers written by Redfin agents faced competition in January, according to the report.
“Competition really ramped up again in the second half of January…