Roughly 57,000 home sale agreements nationwide were canceled during June, which is equal to 14.9% of homes that went under contract last month.
According to a new report from Redfin, June’s share of canceled sales was up by 13.9% from one year earlier and marked the highest June share since data records were first compiled in 2017.
Redfin attributed the increased level of cancelations to elevated home prices, still-high mortgage rates and monthly payments, and an increased level of uncertainty on the economy’s near-future. Redfin is forecasting a 1% year-over-year dip in home prices by the end of 2025, with mortgage rates remaining essentially unchanged in the 6.8% range.
On a localized level, Jacksonville, Florida, led the nation with more than one in five (21.4%) home purchase agreements getting canceled in June, the highest share of 44 major metros Redfin analyzed. This was followed by Las Vegas (19.7%) and Atlanta (19.6%). The biggest year-over-year increases in contract cancellations are in California: In Anaheim, 15.2% of deals were canceled, up from 12.6%, and in Los Angeles, 17.1% were canceled, up from 14.7%.
On the other end of the spectrum, just 5.4% of home-purchase agreements in Long Island’s Nassau County, New York were canceled in June, the lowest share of the metros Redfin analyzed. This was followed by Montgomery County, Pennsylvania (6.8%) and Milwaukee (8.2%). The share of home-purchase cancellations fell year over year in June in just seven of the metros in this analysis, all by about 1 percentage point or less. The biggest decline was in Fort Lauderdale (16.5%, down from 17.7%), followed by Denver (16.2%, down from 17.2%), and Orlando (19%, down from 19.9%).
Were they canceled by buyers or their lenders? I imagine mounting job losses and the restart of student loan payments affected the numbers.
MOST CANCELLATIONS COME UP AGAINST THE HIGH RATE OF INTEREST ON HOME LOANS 6.9 % AVERAGE. THEY ARE GETTING TURN DOWN BY LENDERS BECAUSE THEY DON’T HAVE ENOUGH INCOME TO PAY THE MORTGAGE.
I don’t agree that high mortgage rates was part of the cause. The buyers knew that going into the agreement. I do think that lenders under estimated the insurance to qualify the buyers. When the buyers tried to get their homeowner’s insurance, the premiums were higher than expected and the buyers didn’t qualify.
I do agree that the uncertainty of the economy still plays a part.
I also think that buyers also still expect houses to be perfect and move in ready. Since the inventory has increased, If things come up in the inspection, they are less likely to move forward because their is another property available.
There’s always a lot of factors that effect changes in our market.
Lower the prices homes are listed too high!!
Sellers set asking prices, buyers determine selling prices.
Realtors love to say that sellers set the listing prices and buyers determine selling prices, that’s complete BS. When a realtor goes out to, hopefully, list the home and has to compete with other realtors, they will suggest the price and then when a home goes under contract and the appraiser goes out, they will appraise it based on the inflated prices that realtors suggested the home be listed at and inflated prices of recent home sales. Realtors love to blame everyone else when business starts to fall but they are a big part of why home prices are so darn high around this country. They just won’t admit it!