House price drop imminent across America
It's also the highest June figure ever recorded since Redfin began tracking cancellations in 2017, and the Sun Belt has become ground zero for cancelled deals. It's all down to the buyers, who currently hold the power in the real estate market. With a surplus of sellers flooding the market and far fewer buyers, Americans looking to buy now have the upper hand, and it seems they're taking full advantage of it.
The soaring cost of homes, home repair and near-record mortgage payments are also giving Americans cold feet. Some buyers simply balk when they see the reality of their future monthly bills. 'I've also heard of some buyers backing out because they're hoping home prices or mortgage rates are going to plummet soon, even though that's unlikely,' Zschirnt said.
There are also budding homebuyers rattled by bigger picture issues like economic uncertainty, tariffs, stubborn inflation and fears of a looming recession. Meanwhile, sellers are scrambling to keep deals alive. 'Sellers are willing to make deals because in today's buyer's market, they don't want to lose out on a sale once they have a buyer under contract,' said Van Welborn, a Redfin Premier agent in Phoenix.
'A few years ago, when the market was more competitive, sellers were able to tell buyers to move on rather than pay for repairs found during the inspection period. 'Now, sellers are doing whatever they can to close the deal. I have one buyer who discovered a septic issue on an ultra-luxury home and was able to talk the seller into reducing the price by $1 million.' The majority of cancelled deals are found in the Sun Belt.
Redfin links the spike to heavy new construction in those regions - meaning even more choices for buyers - as well as skyrocketing insurance costs driven by natural disasters. At the other end of the spectrum, Nassau County, New York, saw just 5.4 percent of deals fall through, making it the lowest in the country. That was followed by Montgomery County, Pennsylvania, with 6.8 percent of cancellations and Milwaukee with 8.2 percent.
Despite those areas remaining strong, cancellations are rising nearly everywhere else across the US. Only seven metro areas saw a drop compared to last year, but the changes were minimal. Fort Lauderdale had the biggest decline, with 16.5 percent of deals canceled down from 17.7 percent, followed by Denver with 16.2 percent down from 17.2 percent.
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