Bidding War Statistics 2022: A Slowing Yet Record-High Competitive Housing Market

The U.S. housing market remains intensely competitive, with a record-high 68.6% of home offers facing bidding wars in February 2022. This statistic, which measures competition among buyers, is the highest level recorded since tracking began in April 2020. However, the rate of increase is slowing, signaling a potential plateau as rising mortgage rates and record-high monthly payments begin to price some buyers out of the market. Key trends show that townhouses and homes priced between $1 million and $1.5 million are the most competitive segments.

What is a Bidding War and How is it Measured?

A bidding war occurs when multiple prospective buyers submit competing offers on a single property, often driving the final sale price above the initial listing price. The data cited here, which is based on offers written by Redfin agents and adjusted for seasonal trends, considers a bidding war to have taken place if an offer received at least one competing bid. This metric is a key indicator of housing market heat and buyer demand relative to the supply of available homes.

Which Metro Areas Had the Highest Competition?

The intensity of bidding wars varies significantly by location. In February 2022, the most competitive metropolitan markets were not the usual coastal hubs but inland cities experiencing rapid growth and severe inventory shortages.

Based on our experience assessment, inventory in markets like El Paso is "ridiculously low," particularly for new-construction homes. Supply-chain issues and labor shortages are delaying new builds, creating a extreme scarcity of move-in ready properties that fuels intense competition among buyers.

What Types of Properties Are Most Competitive?

The property type also dictates the likelihood of a bidding war. In February, townhouses were the most sought-after.

• Townhouses: 75.3% of offers faced competition. This popularity is often attributed to buyers seeking a middle ground between the high cost of a single-family home and the shared walls of a condominium.
• Single-Family Homes: 72.9% of offers faced competition, remaining the classic target for intense buyer demand.
• Condos/Co-ops: 64.6% of offers faced competition. A condo (or condominium) is a type of housing where individuals own their individual unit but share ownership of common areas with other residents.
• Multi-Family Properties: 64.8% of offers faced competition.

How Does Listing Price Affect Competition?

Contrary to what some might expect, the most competitive price point is not the ultra-luxury segment. The data reveals a sweet spot for bidding wars in the upper-mid market range.

• $1 Million - $1.5 Million: 76.6% bidding war rate.
• $600,000 - $800,000: 73.8% bidding war rate.
• Over $1.5 Million: 73.1% bidding war rate.

Homes listed for less than $200,000 were the least competitive, with a 62.7% bidding war rate, primarily due to their extreme scarcity in the current market.

What is the Market Outlook for Buyers?

The fundamental dynamics of low supply and high demand continue to drive competition. However, the economic environment is shifting. The Federal Reserve began raising interest rates in March 2022 to combat inflation, causing the average 30-year fixed mortgage rate to jump past 4% for the first time since 2019. As monthly mortgage payments reach record highs, it is predictable that some buyers will be forced to the sidelines.

For buyers navigating this market, preparation is critical. This includes getting pre-approved for a mortgage, being financially prepared to offer above the list price, and working with an experienced real estate agent. While the pace of increase in bidding wars may be slowing, the overall market conditions suggest that significant competition will persist for the foreseeable future, especially for specific property types and in fast-growing metro areas.