Bidding wars have erupted in some parts of the country as mortgage rates continue to fall after surging past 8% last year.
In some locations in the United States, home sellers are getting between 20 to 30 offers for their listings, St. Louis-based Redfin premier real estate agent, Stayce Mayfield, told Yahoo Finance.
"Prices here are all over the board. If your house is updated with the most recent home trends, you're going to get offers. We're still getting bidding wars with anywhere from 20-30 offers - though it still depends on the location and condition," she said. "I was working with a first-time homebuyer recently. We put in six offers (in the 200 range), and all the houses we put offers on kept losing. One of the houses we put an offer on had 33 other offers."
Although an uptick in home purchases has been seen across the country, real estate agents who spoke with the outlet noted a significant improvement in real estate activity in Phoenix, Arizona; Charleston, South Carolina; Atlanta, Georgia; and Huntsville, Alabama.
In addition to bidding wars, real estate experts noted that home buyers have become pickier about the property they invest in, with many refusing to buy fixer-uppers.
What Led to the Increasing Demand?
The competition in the U.S. has seemingly picked up after a sluggish performance in 2023. The increasing demand in the market, especially for first-time homebuyers, can be attributed to the falling mortgage rates, Zillow senior economist Nicole Bachaud told the outlet.
"Demand in the market, especially from first-time buyers, will likely depend a good deal on what happens with mortgage rates," Bachaud said. "As it looks now, rates are likely to stay down from the 8% peak."
Within the last three months, mortgage rates have plunged more than a full point, falling to 6.62% in the week ending Jan. 4. However, mortgage rates have seen a slight increase since then, hitting 6.66% for 30-year fixed terms in the week ending Jan. 11, according to Freddie Mac.
Mortgage rates are expected to continue falling this year after the Federal Reserve indicated it may start cutting interest rates in the coming months.
