Prospective home buyers can expect to go to war this home-buying season. Robust demand for homes combined with chronically low inventories is leading to an increase in the number of offers sellers are receiving for their homes. According to data from the National Association of Realtors, the occurrence of bidding wars is rising. In March, 37 percent of properties sold at or above the list price – up from 35 percent a year ago. This is partly due to buyers working to outbid one another to have their offer accepted.
"Buyer demand continues to outpace the supply of homes being listed for sale in the market, sustaining the upward pressure on home prices," the NAR reports on its Economists' Outlook blog.
On average, sellers received 2.5 offers on their homes before closing. Of the homes that went for a premium in March, 87 percent sold at 101 to 110 percent of their list price. In a market where prices are already at a premium, bidding wars can make it more difficult for first-time buyers to get a foothold in the market.
Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.5 percent, 15-year rates are near 4.0 percent and the 5-year ARM is averaging 4 percent.
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