He went on: “They’ll ask what they get pre-approved for and, as an example, you’ll tell them $500,000. They’ll then go out and say they have found a place for $550k, (deciding) that they are probably going to have to come in at $575k.”

Despite advising them strongly against bidding above the amount they had budgeted for, some clients had resorted to more desperate methods to come up with the cash, including raiding their retirement accounts.

“You get people scrambling to try to figure out how to get into a home, and for people who have to move, it’s heart wrenching, because they’re really in a pinch,” he said.

He added: “Others try to make a bid, saying they’ll buy a home when their own home sells, but no-one will take a contingency offer.”

While the bidding war is largely the consequence of having too few homes on the market, Tatom said cost was also another key issue that was preventing builders from increasing housing stock.