Buyers are backing out of home purchase deals at a record rate — but real estate agents say deals are falling through on flimsy grounds.
“We’re seeing nightmare scenarios where deals are getting canceled at the last minute for the most minute reasons,” said Rafael Corrales, a Redfin Premier agent in Miami, where about 2,500 home purchases were canceled in June (or 17.6% of homes that went under contract).
Don’t miss
-
Commercial real estate has beaten the stock market for 25 years — but only the super rich could buy in. Here’s how even ordinary investors can become the landlord of Walmart, Whole Foods or Kroger
-
Car insurance premiums in America are through the roof — and only getting worse. But 5 minutes could have you paying as little as $29/month
-
These 5 magic money moves will boost you up America’s net worth ladder in 2024 — and you can complete each step within minutes. Here’s how
However, Corrales adds there’s a bigger problem that’s giving buyers cold feet.
“Buyers often back out during the inspection period because they find something they don’t like, but affordability is really the underlying issue.”
Home purchases getting canceled at a record rate
A recent Redfin report reveals around 56,000 home purchases fell through last June — or, nearly 15% of homes that went under contract — marking the highest percentage of any June on record.
“Buyers are getting more and more selective,” said Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area.
“They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to rationalize not getting everything on their must-have list.”
Americans are thinking twice about purchasing property right now with the median home sale price climbing 4% since last year to a record $442,525 in June and the average 30-year mortgage rate at 6.92%.
Some are also considering waiting it out a little longer in the hopes that the key rate could fall in September — even though policymakers just voted to hold it steady in July — and ease some of their affordability concerns.
Read more: Car insurance rates have spiked in the US to a stunning $2,150/year — but you can be smarter than that. Here’s how you can save yourself as much as $820 annually in minutes (it’s 100% free)
Sellers are slashing prices
With fewer takers, properties are languishing longer on the market, with the number of active listings climbing nearly 13% since last year, according to Redfin.
“We’re seeing a slow shift from a seller’s market to a buyer’s market,” said National Association of Realtors chief economist Lawrence Yun in a recent press release.
“Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis.”
As a result, desperate sellers trying to offload their homes are reducing prices to reel buyers back in.
Nearly one in five homes for sale in June had a price cut — also the highest level of any June on record, reports Redfin. That’s a jump from 14.4% the year prior and just behind the 21.7% record set in October 2022.
What to read next
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Source Agencies
