Latest news with #mortgagerates
Daily Mail
2 days ago
- Business
- Daily Mail
Realtors panic as buyers pull out of deals at near record levels
The US housing market is teetering — and buyers are running for the exits. Spooked by high mortgage rates, mounting insurance premiums, and growing fears of a shaky economy, an astonishing one in seven buyers are bailing at the last minute. In April alone, 56,000 home purchase contracts were canceled — equal to 14.3 percent of all pending deals, according to a new report from Redfin. That's the second-highest April cancellation rate ever recorded, topped only by the early pandemic chaos in 2020. Reasons for would-be buyers to bail are stacking up fast. A shaky economy and fear of jobs as a result has caused many to get cold feet as they worry they will not be able to cover the monthly payment. Stubbornly-high mortgage rates that hit 7 percent mean those payments are higher than many want to pay. Growing evidence of the house price bubble burst are the icing on the cake for many. They do not want to buy now, only to see property values plummet. The Miami housing market is on a knife-edge as spiraling numbers of homebuyers pull out of deals. It's the latest area in the Sunshine State at risk of a crash. Desiree Bourgeois (pictured), a Redfin realtor in Detroit, said that at a recent open house, younger buyers were worried about how tariffs, and the economic uncertainty around them, was going to impact the housing market. 'They're hearing the words "tariffs" and "recession," and it's making them nervous that if they buy now, the value of their home will decline, and they don't know whether mortgage rates will go up or down. 'There's a lot of uncertainty out there, with buyers trying to understand how their purchase would fit into their personal finances and the broader economic puzzle.' Meanwhile, Efosa, CEO of Fire Cash Buyer , said he has pulled out of two contracts recently because he's not optimistic about where the US housing market is headed. Instead, he's waiting for the market to crash, then he plans to buy. 'I'm waiting on the market to cycle as it did in 2008. This is a perfect storm for an eventual market crash due to this affordability crisis,' he says. 'I will be one of the smart ones waiting on the sideline to buy at the right time, not at the top of the market.' Once again, Florida is proving to be a problem. The Sunshine State accounts for five of the ten areas with the highest cancellation rates, including Orlando (19.4 percent), Tampa (19.1 percent), and Miami (18.9 percent). Other cities hit hard with last minute cancellations include Atlanta, with 20 percent of pending sales falling through, That was followed by Riverside, CA (19.1 percent) and Fort Worth, TX (18.7 percent.) Buyers are also being met with too many choices, which is causing them to back out of deals at the last minute. Housing inventory is at a five-year high, and some buyers are backing out during inspection in hopes of finding something better. In disaster prone areas like California and Louisiana, skyrocketing insurance premiums are killing deals. 'Some lenders won't sign off if buyers can't insure the home affordably,' Efosa says. But despite many potential buyers ability to seal the deal, savvy house hunters are on alert. Redfin reports that when deals fall through, there's a window of opportunity for those who are serious about buying. 'Two of my buyers got great homes this way,' said Alison Williams, a Sacramento-based agent. 'When a deal collapses, we jump in before the home even relists.' Williams advises that if a buyer is outbid, they should have their real estate agent submit a backup offer anyway. If the winning bidder backs out, you're up next – likely at a discount. In the current housing market, sellers are also having to come back to reality on pricing on concessions. It's a buyer's market. 'When buyers pull out, sellers are lowering prices and offering concessions just to seal the deal' Efosa says. While Florida sits atop the cancellation study, the biggest year-over-year jumps in contract fails came from Anaheim, CA (up 3.1 points), Seattle, Milwaukee, and Los Angeles — areas all dealing with too many listings flooding the market. On the low end, Nassau County, NY had the lowest cancellation rate in the US at 4.8 percent. With the mass cancellations, Efosa says believe a market correction is inevitable. 'It's already happening,' Efosa warned. 'Foreclosures are up. The market will have to come down. The numbers don't lie.' Meanwhile, sellers are panicking about just how much they will have to lower the price of their homes in order to sell. Over the next year, home prices will drop by 1, according to Redfin, marking the end of more than a decade of almost uninterrupted price hikes. Before and during the pandemic, when there were record-low mortgage rates, buyers would often face bidding wars and lose out on homes. Now, the ball is in their court. The average 30-year fixed mortgage rate was 7 percent on Memorial Day. Redfin predicts rates are likely to hover around 6.8 percent through 2025. Meanwhile, inventory keeps rising. The number of homes on the market has shot up 16.7 percent in just a year — to the highest level in 5 years.
Yahoo
3 days ago
- Business
- Yahoo
This is an 'opportunistic' housing market
The housing market has been hit by high mortgage rates and low inventory, creating confusion for consumers who want to know whether or not now is the time to buy. In the video above, Bank of America head of consumer lending Matt Vernon shares the results of the latest Bank of America Homebuyer Insights Report and explains why, for some buyers, it could be an "opportunistic" market. To watch more expert insights and analysis on the latest market action, check out more Wealth here. Housing market uncertainty. It is at a three-year high, according to the Bank of America Home Buyer Inside Report. 60% of home buyers and home owners can't tell whether now is a good or bad time to buy a new home. For more, I want to bring in Matt Vernon, Bank of America head of consumer lending. Matt, good to have you here with us. Just take us into this survey. It was conducted back in March and April. Do you think that uncertainty remains high? Hey, I think our respondent and Brad, good to see you. I think our respondents have have told us very clearly that they are a little bit confused right now and uncertain on whether it is a good time to buy with all of the different factors that are occurring from home prices and rates and volatility in the market. That said, 52% of our respondents are actually more optimistic that the housing market is heading in the right direction, up from a year year ago at less than 45%. So the movement is there. And then importantly, 75% of our respondents are absolutely interested in buying a home and they're ready to act as soon as they see some signs that rates are coming down or prices are coming down. They're going to jump right in and be very optimistic. And so, do you think this will affect the current home buying season, the sentiment, at least as evidenced through the survey data? Yeah, I think certainly we're off to a bit of a slower start. All the data shows that than we've traditionally seen in the spring market. That being said, the word opportunistic is probably the word of the day, right? Because folks are waiting for something to incentiv them to get back into the market. So right now, if we were to see rates come down like we've seen, and go up by the way, over the last, call it four months, when it comes down, I would expect folks that have prepared for home ownership, have found that property, have worked with a professional to jump back in and capitalize on that opportunity. And so we know that mortgage rates continue to remain lower than one year ago, more inventory for buyers to choose from in the last few years as Freddie Mac's chief economist also remarked in the recent rates that were released. So, how are you seeing some of the buyer propensity in comparison to years past at this point in the season where we know people are checking their list, they're getting out there, and they're trying to figure out what's going to sit within their price point and whether that be on the existing or the new home side? Yeah, I think it's it's an opportunistic market as I spoke to just a few moments ago. Rates are now in this new normal trading range of call it low sixes to the upper sixes and yet they move in there. So for those prospective home buyers who've done their research, that have saved, have prepared their credit, and they've found that home, when they see something that is going to again incentivize them to go do it, they're going to jump on it because if not, there's someone else more than likely that's looking at that same property. So having a pre-approval and getting out there with a real estate professional and making that offer when the when the rates are good or the prices come down is going to be incredibly important in this competitive market. What are you seeing in some of the generational differences? Members of Gen Z, even, maybe financing their home purchases. Yeah, interestingly enough, right? The Gen Z and the millennials still believe that home ownership is an achievement in life and it builds long-term wealth. And ultimately, they're doing the things that I would say past generations have done to achieve dream that dream of home ownership, whether that's taking out an extra job to save for a down payment, whether that's um really considering moving in with siblings. We've saw some good data on that or even asking mom and dad for a loan to get into that in addition to some of that 529 work that are previous your previous uh individual was chatting about. A study, we know, by the National Association of Realtors found that the average first-time home buyer was 38 years old last year. Do you think that number could retreat or go down in the near term? You know, it has certainly been increasing over the last call it five years to the number that you talked about that 38. I would not frankly be surprised if it moves a little bit here in the interim, but then I really do think it's going to flatten out as this new normal environment kind of takes place and we begin to see inventory come online and the market begins to function a little better than it has here recently and more closely to how it has historically. I told myself I would own a home by age 32 when I was graduating college. Boy, did I have a lot of learning to do. Matt, thanks so much for taking the time. My pleasure, Brad. Thanks. Sign in to access your portfolio
Yahoo
4 days ago
- Business
- Yahoo
This is an 'opportunistic' housing market
The housing market has been hit by high mortgage rates and low inventory, creating confusion for consumers who want to know whether or not now is the time to buy. In the video above, Bank of America head of consumer lending Matt Vernon shares the results of the latest Bank of America Homebuyer Insights Report and explains why, for some buyers, it could be an "opportunistic" market. To watch more expert insights and analysis on the latest market action, check out more Wealth here.
Daily Mail
4 days ago
- Business
- Daily Mail
Realtors panic as buyers pull out of deals at near record levels: 'Market is crashing before our eyes'
The US housing market is teetering — and buyers are running for the exits. Spooked by high mortgage rates, mounting insurance premiums, and growing fears of a shaky economy, an astonishing one in seven buyers are bailing at the last minute. In April alone, 56,000 home purchase contracts were canceled — equal to 14.3 percent of all pending deals, according to a new report from Redfin. That's the second-highest April cancellation rate ever recorded, topped only by the early pandemic chaos in 2020. 'We see a lot of deals collapsing, especially in major markets like Las Vegas and Phoenix,' real estate expert and CEO of Fire Cash Buyer Joel Efosa told 'It's especially first-time buyers. Some are losing their jobs, others simply no longer qualify for loans because they don't make enough or have good credit.' He added 'Realtors are asking sellers to accept the truth — the market is crashing before our eyes.' Reasons for would-be buyers to bail are stacking up fast. A shaky economy and fear of jobs as a result has caused many to get cold feet as they worry they will not be able to cover the monthly payment. Stubbornly-high mortgage rates that hit 7 percent mean those payments are higher than many want to pay. Growing evidence of the house price bubble burst are the icing on the cake for many. They do not want to buy now, only to see property values plummet. The Miami housing market is on a knife-edge as spiraling numbers of homebuyers pull out of deals. It's the latest area in the Sunshine State at risk of a crash. Desiree Bourgeois, a Redfin realtor in Detroit, said that at a recent open house, younger buyers were worried about how tariffs, and the economic uncertainty around them, was going to impact the housing market. 'They're hearing the words "tariffs" and "recession," and it's making them nervous that if they buy now, the value of their home will decline, and they don't know whether mortgage rates will go up or down. 'There's a lot of uncertainty out there, with buyers trying to understand how their purchase would fit into their personal finances and the broader economic puzzle.' Meanwhile, Efosa, CEO of Fire Cash Buyer, said he has pulled out of two contracts recently because he's not optimistic about where the US housing market is headed. Instead, he's waiting for the market to crash, then he plans to buy. 'I'm waiting on the market to cycle as it did in 2008. This is a perfect storm for an eventual market crash due to this affordability crisis,' he says. 'I will be one of the smart ones waiting on the sideline to buy at the right time, not at the top of the market.' Once again, Florida is proving to be a problem. The Sunshine State accounts for five of the ten areas with the highest cancellation rates, including Orlando (19.4 percent), Tampa (19.1 percent), and Miami (18.9 percent). Other cities hit hard with last minute cancellations include Atlanta, with 20 percent of pending sales falling through, That was followed by Riverside, CA (19.1 percent) and Fort Worth, TX (18.7 percent.) Buyers are also being met with too many choices, which is causing them to back out of deals at the last minute. Housing inventory is at a five-year high, and some buyers are backing out during inspection in hopes of finding something better. In disaster prone areas like California and Louisiana, skyrocketing insurance premiums are killing deals. 'Some lenders won't sign off if buyers can't insure the home affordably,' Efosa says. But despite many potential buyers ability to seal the deal, savvy house hunters are on alert. Redfin reports that when deals fall through, there's a window of opportunity for those who are serious about buying. 'Two of my buyers got great homes this way,' said Alison Williams, a Sacramento-based agent. 'When a deal collapses, we jump in before the home even relists.' Williams advises that if a buyer is outbid, they should have their real estate agent submit a backup offer anyway. If the winning bidder backs out, you're up next – likely at a discount. In the current housing market, sellers are also having to come back to reality on pricing on concessions. It's a buyer's market. 'When buyers pull out, sellers are lowering prices and offering concessions just to seal the deal' Efosa says. While Florida sits atop the cancellation study, the biggest year-over-year jumps in contract fails came from Anaheim, CA (up 3.1 points), Seattle, Milwaukee, and Los Angeles — areas all dealing with too many listings flooding the market. On the low end, Nassau County, NY had the lowest cancellation rate in the US at 4.8 percent. With the mass cancellations, Efosa says believe a market correction is inevitable. 'It's already happening,' Efosa warned. 'Foreclosures are up. The market will have to come down. The numbers don't lie.' Meanwhile, sellers are panicking about just how much they will have to lower the price of their homes in order to sell. Over the next year, home prices will drop by 1, according to Redfin, marking the end of more than a decade of almost uninterrupted price hikes. Before and during the pandemic, when there were record-low mortgage rates, buyers would often face bidding wars and lose out on homes. Now, the ball is in their court. The average 30-year fixed mortgage rate was 7 percent on Memorial Day. Redfin predicts rates are likely to hover around 6.8 percent through 2025. Meanwhile, inventory keeps rising. The number of homes on the market has shot up 16.7 percent in just a year — to the highest level in 5 years.
Reuters
4 days ago
- Business
- Reuters
Is spring still the best time to buy or sell a home?
NEW YORK, May 30 - This was originally published in the On The Money newsletter, where we share U.S. personal finance tips and insights every other week. Sign up here to receive it for free. Spring traditionally is considered the buying and selling season for the housing market. But there has been a bit of a vibe shift. U.S. homeowners and prospective buyers are feeling uneasy, a new Bank of America survey shows, as rising mortgage rates deter buyers. Of the 2,000 respondents to BofA's poll, 60% said they could not tell whether it was a good time to buy a home, according to the report published by the nation's second-largest lender. That is up from 57% last year and 48% in 2023. Economic uncertainty is not stopping everyone from buying new homes: Sales of new U.S. single-family homes surged to more than a three-year high in April, as builders lowered prices to attract buyers. But new housing inventory is still near levels last seen in 2007. New homes are not exactly cheap, either. The median new house price was $407,200 in April. Another interesting tidbit is that new homes are getting smaller. So why aren't they more affordable, opens new tab? If you're buying a home, selling a home or wondering what to do now, I want to hear from you. Tell me about your experience. Write to me at What the current SALT tax proposal means for you I've been especially interested in tax legislation working its way through Congress, especially because the Republican-led U.S. House of Representatives passed a bill last week that would allow a deduction of up to $40,000 on federal returns for state and local taxes, known as SALT. A previous version of the bill had a cap of $30,000. If passed by the Senate, the new expanded SALT cap would benefit millions of big earners in high-tax states, including New York (where I live), New Jersey, Pennsylvania (where my parents live), Maryland, Oregon and California. Of course, bills tend to morph and change in the legislative process. As Donald Trump's so-called 'big, beautiful bill' winds its way through the Senate, it could end up looking very different. Follow the latest news here. And let me know if you stand to benefit from an expanded SALT deduction. Write to me at Read, watch and listen What's behind these big stock swings? JetBlue, United tie up to let passengers book on both websites Humanoid labor: Behind the global race for robot supremacy How the student-loan crisis will show up in the economy, opens new tab (WSJ) Trump administration axes Biden-era barrier for crypto in 401(k) plans, opens new tab (CNBC) Why Amazon's in-car software deal with Stellantis fizzled Retirees, get ready to need long-term care. Here's what to know, opens new tab (NYT) Five things I learned reading Reuters this week How do you stay informed about climate change? Reuters is surveying readers like you to find out how you get your news about climate change, and what your concerns are around the topic. It took me less than two minutes to take the survey, andyou can do so here, opens new tab.
