Agent Offfers
Realty Times TV

Cold Feet: Homebuyers Backed Out of Deals at a Record Rate in June

Written by Posted On Wednesday, 24 July 2024 09:15
Cold Feet: Homebuyers Backed Out of Deals at a Record Rate in June

Redfin reports about 56,000 home purchases were canceled, equal to 15% of homes that went under contract—the highest percentage of any June on record

Deals to purchase homes are falling through at a record rate as high housing costs give buyers cold feet, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Nearly 56,000 home-purchase agreements were canceled in June, equal to 14.9% of homes that went under contract that month—the highest percentage of any June on record.

House hunters are having trouble committing because buying a home is more expensive than ever. The median home sale price rose 4% year over year to a record $442,525 in June, and the average interest rate on a 30-year mortgage was 6.92%. While that’s down slightly from 7.06% the prior month, it’s still more than double the all-time low hit during the pandemic.

“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.”

June 2024 Housing Market Highlights: United States

 

June 2024

Month-over-month change

Year-over-year change

Median sale price

$442,525

0.9%

4.0%

Homes sold, seasonally adjusted

417,179

-0.5%

-1.1%

Total homes for sale, seasonally adjusted (active listings)

1,636,110

-0.1%

12.8%

Months of supply

2.6

0.2

0.7

Median days on market

32

1

3

Share of for-sale homes with a price drop

19.8%

1.7 ppts

5.4 ppts

Share of homes sold above final list price

35.1%

0.0 ppts

-4.5 ppts

Average sale-to-final-list-price ratio

99.9%

0.1 ppts

-0.4 ppts

Pending sales that fell out of contract, as % of overall pending sales

14.9%

0.3 ppts

0.2 ppts

Average 30-year fixed mortgage rate

6.92%

-0.14 ppts

0.21 ppts

Three Florida Metros Led the Nation in Home-Purchase Cancellations

In Orlando, about 900 home-purchase agreements were canceled in June, equal to 20.8% of homes that went under contract that month—the highest percentage among the 50 most populous U.S. metropolitan areas. Next came Jacksonville (20.5%), Tampa (20.5%), Las Vegas (20.2%) and San Antonio (19.9%).

“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 roughly 2,500 home purchases were canceled in June—equal to 17.6% of homes that went under contract. “Buyers often back out during the inspection period because they find something they don’t like, but affordability is really the underlying issue. I don’t want my buyers to be surprised by all of the expenses that come with owning a home in Florida, so I advise them to proactively research the hefty costs of insurance, property taxes and HOA fees, in addition to the cost of their mortgage payment.”

Nearly 1 in 5 Sellers Dropped Their Asking Price as Homes Sat on the Market—the Highest June Rate on Record

Roughly one in five (19.8%) homes for sale in June had a price cut—the highest level of any June on record. That’s up from 14.4% a year earlier and is just shy of the 21.7% record high set in October 2022.

Some sellers are reducing their prices because their homes are sitting on the market and getting stale—the result of an ongoing affordability crisis impacting buyers. The typical home that sold in June spent 32 days on the market, the longest of any June since 2020. That’s up three days from a year earlier—the biggest annual increase since last summer. Listings are piling up as a result; active listings, or the total number of homes for sale, were little changed from a month earlier but jumped 12.8% from a year earlier—the largest annual gain on record.

U.S. Home Sales Posted the Biggest Monthly Decline Since October

Home sales fell 0.5% month over month in June on a seasonally adjusted basis. While that may seem like a small decline, it’s the biggest since October 2023. Home sales dropped 1.1% from a year earlier and were 21.5% below pre-pandemic (June 2019) levels.

Sales are sluggish because many Americans can’t afford to buy homes. While mortgage rates ticked down in June (and have fallen further this month), some buyers are waiting on the sidelines in hopes that they’ll drop even more. But those buyers may be waiting in vain, said Redfin Economics Research Lead Chen Zhao, as rates are unlikely to fall much in the next few months, and markets have already priced in a September rate cut.

Metro-Level Highlights: June 2024

  • Prices: Median sale prices rose most from a year earlier in Anaheim, CA (13.2%) Newark, NJ (12.6%) and Nassau County, NY (12%). They fell in four metros, all of which are in Texas: Austin (-5.5%), Dallas (-1.6%), San Antonio (-1.3%) and Fort Worth (-0.2%).
  • Price cuts: In Indianapolis, 49.2% of listings had a price drop—a higher share than any other metro Redfin analyzed. Next came Denver (46.6%) and Tampa (43%). The lowest shares were in Newark (15.2%), Chicago (16.3%) and Milwaukee (17%).
  • Active listings: Active listings rose most in Tampa (47%), Fort Lauderdale, FL (45.3%) and Orlando (41.4%). They fell most in Chicago (-7.4%), New Brunswick, NJ (-7%), Chicago (-7.3%) and New York (-5.8%).
  • Closed home sales: Home sales rose in just one metro: San Jose, CA (1.8%). They fell least in Portland, OR (-3.2%), Oakland, CA (-3.7%) and San Diego (-5%), and fell most in West Palm Beach, FL (-23.5%), Fort Lauderdale (-23%) and Virginia Beach, VA (-17.7%).
  • Sold above list price: In San Jose, 72.1% of homes sold above their final list price, the highest share among the metros Redfin analyzed. Next came Newark (71.7%) and Oakland (63.1%). The shares were lowest in West Palm Beach (7.3%), Miami (11.4%) and Fort Lauderdale (12.3%).

To view the full report, including charts, please visit:

https://www.redfin.com/news/home-purchase-cancellations-june-2024

Rate this item
(0 votes)
Redfin

Redfin is a technology-driven real estate company with the country's most-visited real estate brokerage website. As part of Rocket Companies (NYSE: RKT), Redfin is creating an integrated homeownership platform from search to close to make the dream of homeownership more affordable and accessible for everyone. Redfin’s clients can see homes first with on-demand tours, easily apply for a home loan with Rocket Mortgage, and save thousands in fees while working with a top local agent. You can find more information about Redfin and get the latest housing market data and research at Redfin.com/news. For more information about Rocket Companies, visit RocketCompanies.com.

https://www.redfin.com

Latest from Redfin

back to top

Agent Resource

Before You List

Today's Headlines

Realty Times

From buying and selling advice for consumers to money-making tips for Agents, our content, updated daily, has made Realty Times® a must-read, and see, for anyone involved in Real Estate.

Links

Sections

Search

Joomla! Debug Console

Session

Profile Information

Memory Usage

Database Queries