Home prices soar in frenzied U.S. market drained of supply

Last year's pandemic housing rush is now this year's end-of-lockdown feeding frenzy.

Across the U.S., house hunters are fighting for scraps in a market picked clean of listings during the key spring homebuying season. Bidding wars are the norm. Strategies like waiving inspections to secure deals, common for years in hot West Coast tech hubs, are popping up in places from Buffalo, New York, to Salt Lake City.

Demand is so fierce that almost half of U.S. homes are selling within a week of hitting the market, a record pace, according to Redfin. Annual price growth reached 17% in March, the highest in data going back to 2012. Urgency is amped up, with real estate agents commonly limiting bidding to a few days and then pitting buyers against each other.

"New listings get snatched up right away," said Daryl Fairweather, Redfin's chief economist. "First it was, the faster you move, the more of an edge you have. Now if you don't put in an offer five days after it's listed, you're not going to be considered at all."

This clamor is intensifying a pandemic boom begun last year, fueled by record-low mortgage rates and demand for bigger houses in a remote-work world. Now, growing optimism about an economic recovery -- as well as the prospect of rising borrowing costs -- are bringing out Americans who are flush with savings from a year of staying home. Some employers also are signaling long-term job flexibility, enabling buyers to spread out to the suburbs or move to cheaper locales.

At the same time, the supply of homes is shrinking fast. Inventory in the warmer months typically expands because sellers like to list in the spring to have deals closed by summer, when families can settle in before school starts. But in March, the number of active listings dropped by more than 40% from a year earlier to the lowest level on record,...