The Federal Reserve’s ambitious efforts to combat rising inflation seem to be working as soaring mortgage rates cause a growing number of buyers to hold off on home purchases in a less competitive spring market. Sixty-five percent of home offers written by Redfin agents faced competition on a seasonally adjusted basis in March compared to 66.7% in February, marking the first month-over-month decline since September, Redfin reports.
Though bidding wars are still common in most home purchases, buyers are likely to face fewer competing offers in the coming months, but those who have already been priced out can expect no relief from a worsening affordability crisis.
“March was the first month in two years that I had a weekend with zero house tours. People are getting priced out,” said Maria Giron, a Redfin real estate agent in the Bay Area. “Some buyers are in shock and dropping out altogether. Others are looking at more affordable options like smaller homes or neighborhoods that are farther out. The buyers I’m working with who are most sensitive to the rise in mortgage rates are first-time buyers looking for homes in the $500,000 to $700,000 range.”
Giron continued: “Homes are still getting multiple offers, especially in desirable areas, but those in other areas are now seeing fewer offers than they were a couple of months ago.”