Bidding Wars Cool in the US Housing Market: Data Shows Decline from Spring Peak

The intensity of bidding wars in the U.S. housing market is softening. According to recent data, 65% of home offers faced competition in June, a significant drop from the pandemic peak of 74.1% in April. While this rate remains higher than a year ago, the decline signals a shift driven by buyer fatigue, a modest increase in new listings, and typical seasonal patterns. For prospective buyers, this cooling competition may present a window of opportunity with slightly less pressure.

What is Causing the Decline in Bidding Wars?

Several key factors are contributing to the easing of competition. After months of intense bidding and rapidly rising prices, many buyers are experiencing buyer fatigue. Some have been priced out of the market, while others have withdrawn after repeatedly losing out on homes. Additionally, the supply of homes is slowly improving. New listings have returned to pre-pandemic levels, rising 4% year over year, giving buyers more options and reducing the desperation that characterized the market earlier in the year. Seasonality also plays a role, as competition often peaks in the spring and relaxes during the summer months.

Real estate agents are observing this change firsthand. "The first half of this year was red hot—it was almost impossible to get an offer accepted. But recently, we’ve started to see buyers get cold feet," noted a real estate agent in Southern California based on our experience assessment. This trepidation is leading to a more cautious approach from buyers.

How Are Buyer Strategies Changing?

The change in market dynamics is directly impacting how buyers structure their offers. A clear sign that competition is abating is that more buyers are starting to keep contingencies in their contracts. A contingency is a condition that must be met for the sale to proceed, such as the sale of the buyer's current home or a satisfactory home inspection. At the peak of the market, buyers often waived these protections to make their offers more attractive to sellers.

An agent in Boise, Idaho, provided a clear example: "Two months ago, sellers were getting 10 to 15 offers within 48 hours and buyers were waiving every contingency. That’s no longer the case." The agent recently saw a seller accept an offer that was contingent on the buyer selling their existing home, a scenario that was rare just a few months ago. Buyers are now less likely to overlook properties that need significant repairs, indicating a shift away from desperation-driven purchases.

Which Metro Areas Still Have the Hottest Competition?

While the national trend shows cooling, competition remains fierce in specific metropolitan areas. The following table highlights the U.S. metros with the highest bidding-war rates in June. A bidding war is defined as an offer facing at least one competing bid.

As the data shows, competition is still exceptionally high in popular Sun Belt and secondary markets. An agent in Seattle, which had a rate of 71.2%, noted that bidding wars are slowing for mid- and higher-priced homes but remain intense for lower-priced homes in highly sought-after neighborhoods.

Practical Advice for Buyers and Sellers

For buyers, the current environment may offer a chance to reintroduce protective contingencies into offers without automatically losing a bidding war. It is also an opportune time to focus on homes that have been on the market for more than a week, as seller motivation may be higher. For sellers, pricing a home correctly from the start is more critical than ever. Overpriced listings are likely to sit as buyer urgency wanes. Understanding local market conditions is essential, as the national trend masks significant variations between cities and even neighborhoods.