Listings fall out of contract as rates rise
A new report from Redfin suggests another way higher mortgage interest rates are wreaking havoc on the housing market: more buyers are giving up on buying.
The share of failed home purchase deals last month rose to 14.9%, from 12.7% in May and 11.2% in June 2021. It is also the highest share since the early 2017, except for a two-month peak when the housing market deepened at the start of the pandemic. More than 60,000 homes fell out of contract across the country in June.
The increase doesn’t necessarily reflect homes that were agreed to in June, Redfin researchers noted, but they blamed rising mortgage rates and an uptick in purchasing power that is leading some maintain inspection and assessment options instead of giving them up.
“If rates were 5% when you made an offer, but were up to 5.8% when you closed the deal, you may not be able to afford that house anymore or you may not be able to qualify for a loan,” said Redfin’s deputy. Chief Economist Taylor Marr said in a statement.
In the Greater Worcester area, 11.9% of home sales deals failed last month, compared to 9.6% in Boston.
Redfin did not report how those rates compared to previous years. However, both markets compare very favorably to dozens of Sun Belt communities and even other northern cities.
Las Vegas (27.2% of pending sales) leads the nation in share of pending sales out of contract, followed by Lakeland, Florida (26.7%), Cape Coral (25.7%) , Port St. Lucie (25.7%) and Jacksonville (25.3%). percent) subways.
Other major cities where at least 20% of June pending sales have been canceled include: Phoenix, New Orleans, Tampa, Houston, Atlanta and Miami.
The metros where between 12% and 20% of June pending sales have been canceled are: Dallas, San Diego, Denver, Los Angeles, Austin, Pittsburgh and Hartford.
Metros that saw a lower share of homes going into default last month than Boston or Worcester included: Minneapolis, New York and San Francisco.