Remember Housing Market Bidding Wars?
Yes, those nail-biting negotiations. You may still see them here and there in certain areas and markets – but the heyday for bidding wars seems to have passed.
Looking at the numbers, the number of for-sale listings was up 2.8% annually in June, but that was down from May’s 2.9% gain, according to realtor.com. Many of our realtor friends have confirmed that competition in the housing market was starting to cool off this year – with fewer bidding wars and an increase in listings.
And yet…here we go again. Just as things were settling down, the housing shortage that brought us to record high price gains through 2018, is on the verge of revving up once again. Realtor.com further confirms that supply is expected to drop and hit a new low, after a short surge that came about at the end of the year.
According to the source, inventory gains slowed in February and have continued to slow throughout the Spring. The latest expectations are that supply will flatten throughout the summer and hit a decline as we launch into the fall.
Cue the mortgage rate factor. Mortgage rates are still low, but many homeowners refinanced their loans when rates were even lower. Sellers looking to downsize would end up doing so in a much more expensive market. The incentive to list a home is not as high in these scenarios.
The good news for buyers is that interest rates on fixed-rate mortgages fell by almost one percentage point – likely fueling some of that momentum in home sales. Those low rates are motivating buyers to come back to the table. Lots more buyers. Which forces up home prices. Which means, of course, that we may not have seen the end of the bidding wars.