More sales of U.S. homes were canceled in April. What's going on?

Yahoo

3 days ago

One in seven pending home sales in the U.S. were canceled in April.
It's the highest share of sales to fall through in April since 2020, which was after the COVID-19 pandemic had been declared just a month earlier, stalling the nation's housing market, according to a new analysis by Redfin, a Seattle-based brokerage site.
Around 56,000 purchase agreements for homes in the U.S. were canceled in April, the analysis found, 14.3% of the homes that went under contract. In April 2024, that percentage was 13.5%.
Data for April dating back to 2017 was studied, Redfin said, because usually, buyers back out of a larger share of contracts at the end of the year, rather than during what's traditionally the busiest season for home sales.
But in Utah and the rest of the country, the spring housing market has been different this year. Sugar House real estate agent Max Strayer described it recently as 'weird' and 'kind of all over the place.'
Nationwide, buyers are hesitating to make big financial commitments like buying a new home amid the economic uncertainty surrounding the impact of President Donald Trump's ever-changing tariff policy.
In addition to buyers having what Redfin labeled 'cold feet' right now, other factors cited for the increased cancellations include the boost in housing inventory, now at the highest level in five years, and the 'sticker shock' of mortgage rates.
This week, mortgage rates rose above the 7% threshold, according to the Mortgage News Daily Index that put Friday's rate for a 30-year fixed rate home loan at 7.02%, down slightly after hitting the highest point in three months the day before.
Atlanta has the highest rate of cancellations in April, 20%, followed by Orlando, Florida, 19.4%; Tampa, Florida, and Riverside, California, both 19.1%, and Miami, 18.9%. The Redfin analysis looked only at the nation's largest metropolitan areas, a list that does not include Utah cities.
The jump in failed sales could be an opportunity for buyers, Redfin said, suggesting they 'may have negotiating power' when a cancellation results in a home going back on the market since there may be a perception there was something wrong with the property.
Another tip from Redfin: Would-be buyers outbid on a home should be ready with a backup offer if the original deal is pulled.
Sacramento, California, real estate agent Alison Williams said in a post on the Redfin site that two of her buyers were able to land the homes they wanted by getting offers in even before the properties were back on the market.
'It's a tactic that has been working really well, especially when it's a home my client was already interested in,' Williams said. 'I will circle back with the listing agent to see if the other buyer is wavering.'