The US housing market is experiencing a significant downturn as buyers walk away from home purchases at the highest rate on record. In June, over 57,000 homes were abruptly canceled, accounting for 14.9% of homes that went under contract. This marks the highest figure ever recorded by Redfin since tracking cancellations in 2017.
The Sun Belt regions have become the epicenter of this crisis, with cities such as Jacksonville, Florida; San Antonio, Texas; and Tampa, Florida, seeing record-high cancellations. The main reason for this exodus is buyers holding power in the market, with a surplus of sellers and fewer buyers driving Americans to take advantage of the situation.
Buyers are canceling deals during the inspection phase due to various reasons, including identifying real flaws that may cost too much to fix and concerns about soaring home prices, mortgage payments, and economic uncertainty. Redfin expects home prices to decline 1% year-over-year nationwide by the end of 2025, and mortgage rates to remain around 6.8%.
Sellers are scrambling to keep deals alive, with many willing to make concessions to avoid losing out on a sale. However, some areas remain strong, such as Nassau County, New York, which saw only 5.4% of deals fall through.
The crisis is being driven by heavy new construction in regions like the Sun Belt and skyrocketing insurance costs due to natural disasters. Despite this, cancellations are rising nearly everywhere else across the US, with some areas experiencing significant year-over-year increases, such as California.
Redfin’s data suggests that buyers are becoming increasingly cautious, with concerns about economic uncertainty, tariffs, inflation, and recession fears contributing to their decision-making. As a result, the US housing market is on the brink of collapse, leaving sellers scrambling to adapt to the changing landscape.
Source: https://www.dailymail.co.uk/real-estate/article-14926417/house-price-drop-america-sales-collapse.html