The housing market has developed a massive case of cold feet as home purchase transactions are being canceled at a record rate, according to new data from Redfin (NASDAQ:RDFN).
During June, Redfin recorded nearly 56,000 home-purchase agreements cancelations, equal to 14.9% of homes that went under contract that month. This marks the highest percentage of deal cancelations for any June on record.
Also during June, the median home sale price rose 4% year-over-year to a record $442,525 while the 6.92% average interest rate on a 30-year mortgage was more than double the all-time low hit during the pandemic.
However, home prices only rose by a relatively scant 0.2% in June, the smallest month-over-month increase since January 2023 on a seasonally adjusted basis.
“Even though price growth has been slowing down, falling mortgage rates and lower-than-usual inventory levels are likely to keep prices ticking up in the coming months,” said Redfin Senior Economist Sheharyar Bokhari. “The Redfin Home Price Index has only fallen twice in its 12-year history—in August and September 2022, when mortgage rates and inventory spiked significantly. Those things are unlikely to happen this year.”
Smart buying. After the settlement, they might have to pay more and they realize that the ball is in their court. This is a buyers market and the sellers need to drop the prices .
Well, that statement needs qualification. Completely depends on where the market is located as to if it is a buyer’s market or seller’s market.
Buyers Market??? I don’t think so. I listed a home in Spring Lake Park MN, a pretty decent area to live in, in May, and I had 27 offers out of 54 showings in 3 days. It sold well above the list price.
Markets are local. While some may in a seller’s market some of the rest of us are not.
YES – and that’s precisely why the NAR “settlement” is bogus and should be cancelled.
Missing context is buyers are canceling during inspection period. Sellers are listing as-is with serious repairs needed and not disclosed.
A well-educated Realtor will educate their clients and qualify them for the home they can afford, instruct them on possible escrow road-blocks before they occur and thus prevent “cold feet” syndrome from rearing its ugly head.
Agree with Monica. I rarely have a buyer back out, unless their life situation changes suddenly.
Too many newbie starving and desperate agents pushing poorly qualified buyers into signing contracts on properties that will never close. I see it a lot. Market is definitely going flat here. Very few multi offers and bidding wars now. Showings are becoming increasingly scarce, sellers aren’t willing to reduce fast enough to meet the market. I see a dramatic value shift coming after August 17th.
A downturn is well overdue, and should be music to our ears. This is healthy. Markets are cyclical. We just need a catalyst to move us to the next cycle. Hopefully this is it.
I agree that the cancellation of a purchase depends on how through the agent/mortgage broker has been in qualifying the buyer. I have never had a cancellation from a buyer during the process of a purchase in a variety of “markets”. I have also turned down clients that have wanted to “rush” into a purchase before I have totally qualified them. I let them go and work with another agent.
basically: the cost of development- improvements – electrical, natural gas, sewers, water mains, roads [cost of material – oil, sand, concrete, heavy equipment – trucks, grades, backhoes, various unions… what is totally obvious is these costs are inherent in —- a house – an apartment complex, neighborhood shopping…. all part of any deal a so-called “salesperson” – of any brand – fully realizes… way, way before a neat, [probable] attractive female sits -properly- across from the typical buyer – or seller- with all those preprinted, often complex contracts – pieces of paper … asking for signatures… and it is all heavily bent in respect to local markets….sorry.