Boston Globe via Getty Images
Pandemic-era home buyers faced intense competition in once affordable markets during the housing market frenzy. But demand is softening as surging mortgage rates, high home prices, inflation and a falling stock market have eroded home buyer budgets, causing some house hunters to back off at an alarming rate, according to a new report from Redfin, a technology-powered real estate brokerage.
Roughly 60,000 home purchase agreements were called off in June, equal to 14.9% of homes that went under contract that month. That’s the highest percentage on record, with the exception of the start of the pandemic. The typical monthly mortgage payment for a home buyer is now $2,387 at the current 5.51% mortgage rate, up 44% from a year ago.
Nationwide, 49.9% of home offers written by Redfin agents faced competition on a seasonally adjusted basis in June. That’s the lowest share since May 2020 and the first time the bidding-war rate has been below 50% since that same month, when the housing market was at a near standstill due to the onset of the pandemic. June’s bidding-war rate compares with a revised rate of 65% one year earlier and 57.3% one month earlier, and marks the fifth-straight monthly decline.
“While the market is cooling, it’s not coming to a crashing halt,” said Shoshana Godwin, a Redfin real estate agent in Seattle. “House hunters who can still afford to buy should consider taking advantage of the slowdown given that there’s way less competition.”In Riverside, California, 31.9% of home offers written by Redfin agents faced competition in June, down from 70.5% a year earlier. That 38.6 percentage-point decline was the largest among the 36 metropolitan areas in this analysis.
When were they last affordable enough that every one could have one?