Approximately 58,000 home purchase agreements were canceled in July, according to new data from the Rocket Companies (NYSE: RKT) division Redfin. The rate of cancelations accounted for 15.3% of homes that went under contract last month, up from 14.5% one year ago.
Last month also marked the highest July cancelation rate in records dating back to 2017.
Redfin noted that cancelation rates were highest in Southern metros – San Antonio led the nation with 730 aborted home-purchase agreements in July, equal to 22.7% of homes that went under contract last month. Other metros with elevated cancelation rates were Fort Lauderdale (21.3%), Jacksonville (19.9%), Atlanta (19.7%), and Tampa (19.5%).
At the other end of the spectrum, home purchases were least likely to fall through in New York’s Nassau County (5.1%), Pennsylvania’s Montgomery County (8.2%), Milwaukee (8.3%), New York City (9.5%) and Seattle (10.2%).
This would be a better post if you broke out the reasons contracts fell through and gave each a percentage. If I weren’t a REALTOR® the headline might scare me, but I’m well versed in reality and my local market.
Agree with Rhonda Douglas! As a retired Real Estate Broker and Certified Residential Appraiser, the reasons the contracts fell through is most beneficial for the current market.
I’m a broker and an attorney, and I thought the same thing! I suspect quite a bit of this has to do with (a) lack of qualifying the buyer, (b) unrealistic expectations (e.g. for short-term rentals), and (c) property conditions. I am seeing a lot of so-called “investors” out there right now trying to get a deal on properties for short-term rental purposes. The lack of “investors'” understanding of a property’s potential in that area is stunning to me. Also, in a stagnant market, a broker who is trying to game the system might be eager to just get a home under contract to show their seller activity – regardless of the actual prospects of closing. That’s “smarmy”, and it potentially wastes a buyer’s money with inspections, etc. prior to cancellation.
Agree with other comments that it would have been very helpful to know the reasons for the cancellations.