Homebuyers are walking away from deals at a record rate as financial pressures mount in an uncertain economy.
A new analysis from Redfin found that nearly 58,000 purchase agreements were canceled in July alone. 15% of home sales in states like Texas and Florida have been hit the hardest.
Redfin’s chief economist Daryl Fairweather says that the economic uncertainty and rising unpredictable interest rates are making buyers hesitant.
“Part of that has to do with volatility in interest rates and home buyers just getting cold feet about how much they’re paying,” Fairweather said.
Mortgage rates aren’t the only factor driving cancellations. Insurance costs are also adding up to the pile, often blindsiding buyers after they’ve already committed to a property.
“You often don’t know how much you’re going to be paying in insurance until after your offer is accepted.” Fairweather added. “So that can be a bit of a shock. Or maybe you can’t find insurance at all, that can cause a deal to fall through.”
In today’s market, buyers could feel like they have the upper hand since they have many options at their disposal. Some buyers back out a deal during inspection periods, leaving sellers in a difficult position since relisting a home after a failed deal can create doubts for future buyers.
With 30-year mortgage rates averaging near 6.5%, buyers are hopeful that the next Federal Reserve meeting on Sept. 17, would lead to lower rates that would ease financial troubles.
