M Report – Esther Cho
Low inventory coupled with rising mortgage rates and home prices are leading prospective buyers to consider using “aggressive” tactics such as overbidding to obtain a home, according to recent survey from Trulia. In order to secure the desired home, 25 percent of prospective buyers in the survey said they were willing to bid 1 to 5 percent above the seller’s asking prices. “Although buying a home is still much cheaper than renting, it’s a stressful time to be a homebuyer,” said Jed Kolko, Trulia’s chief economist. “Consumers are worried that mortgage rates and prices will keep rising before they buy, and many are willing to fight over the limited number of homes for sale.” When it came to overbidding, younger buyers (aged 18 to 34) are more likely to use the strategy. According to Kolko, Millennials are “more willing than their parents’ generation to outbid, borrow, or make a personal plea to get the house they want.” For example, another 9 percent of respondents said they were willing to bid 6 to 10 percent over the asking prices, while 12 percent of younger respondents said the same.