(Gray News) – U.S. homebuyers are backing out of their real estate deals at a record rate.
According to Redfin, nearly 60,000 purchase agreements were canceled in July – the highest percentage of any July on record – and sales of existing homes fell at an annual rate of 2%.
Economic uncertainty is also high, with recession fears on the rise,” Redfin data journalist Lily Katz wrote.
Pending sales of both existing homes and newly constructed homes also dropped to the lowest level on record last month aside from April 2020 when the pandemic brought the economy to a screeching halt.
Redfin reports they declined 2.9% from a month earlier and 5.8% from a year earlier, both the biggest declines in nearly a year.
Mortgage rates have seen a slight decline over the past few months but that hasn’t necessarily helped while still staying above 6%.
Redfin Senior Economist Elijah de la Campa said waiting for mortgage rates to fall isn’t the best strategy either.
“If you have the means to buy and have been thinking about doing so, now actually might not be a bad time,” de la Campa shared.
Gray News: The U.S. s. Retractions from real estate transactions by buyers are occurring at an all-time high.
Redfin reports that existing home sales decreased at an annual rate of two percent in July, and that nearly 60,000 purchase agreements were canceled, the highest percentage of any July on record.
The continued high cost of housing is turning off many prospective homeowners. Recession worries are growing, and economic uncertainty is also high, according to Redfin data journalist Lily Katz.
Aside from April 2020, when the pandemic severely crippled the economy, pending sales of both newly built and existing homes fell to the lowest point ever recorded last month.
The largest declines in almost a year, according to Redfin, were 2 points 9 percent from a month ago and 5 points 8 percent from a year ago.
Although they have slightly decreased over the last few months, mortgage rates have remained above 6 percent, so this hasn’t necessarily helped.
The markets have already factored in a fairly rapid rate of reduction, so homebuyers are unlikely to witness a significant decrease in mortgage rates anytime soon, according to Katz. The Federal Reserve is predicted to begin reducing interest rates in September and continue doing so through 2025.
Waiting for mortgage rates to drop is also a bad idea, according to Redfin Senior Economist Elijah de la Campa.
“This actually might not be a bad time if you have the means to buy and have been thinking about doing so,” de la Campa said. This is because mortgage rates have decreased sufficiently to increase your purchasing power, but not sufficiently to spur a large number of buyers to enter the market and increase competition. “.
In July, Redfin reports that the overall number of properties available for purchase increased by a record 13.7 percent year over year. Additionally, the percentage of homes that sold for more than their asking price dropped to 33% from 38% in July 2020, which is a positive development for prospective buyers.
