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Home sales face highest cancellation rate since pandemic start, Asking Rents show smallest increase: Redfin

Jul. 11, 2022 12:40 PM ETREM, KBH, TOL, PHM, DHI, LEN, XHB, REZ, HOMZBy: SA News Team29 Comments

Bidding War and House For Sale write on sticky notes isolated on Office Desk

syahrir maulana

  • As per a latest Redfin survey, ~60K home-purchase agreements dropped through in June which is equal to 14.9% of homes that went under contract compared to 12.7% in May and 11.2% in June 2021.

  • This is the highest

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Comments (29)

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OverTheHorizon profile picture
FED doing it’s job:

Alohatoyou profile picture
Prudent home buyers lock in their interest rates for a 30 to 45 day period. I suspect many of these folks are walking away for other reasons. Buyers remorse and fear are alive and well. I remember my first house in the 80s carried a 14 percent rate. Hopefully we don’t see those kind of rates.
Illuminati Investments profile picture
If "buyers" can't afford the rate rising from 5% to 5.8% then they have no business buying that house.
drizzlechan profile picture
@Illuminati Investments Uh yeah that's the point dude, a higher interest rate yields a higher mortgage payment which can be beyond peoples affordable range. Any other brilliant financial insights you wish to share mr buffet lol
0xfc profile picture
@drizzlechan I think his point was that even with a 5% mortgage rate on some unknown amount they were already cutting it too close let alone 5.8%.

On a 300,000 dollar mortgage we are talking about 150ish dollars per month more. If that stops them things were already way too tight. They need to find a place that costs less period. Even at 5% they are leaving very little room for error like a spouse getting laid off if they both work, illness, inflation of energy/food, etc..
@drizzlechan illuminai's point is well taken.
MoneyPig profile picture
Congress really trashed the economy, that is all I can say. Congress went around the Treasury, The Federal Reserve and the banking system and gave money directly to everybody and turned the IRS into a monthly check writer.

There is no bottom to stocks, bonds or housing. Prices are going to fall. And then they will start taking about deflation risk and the need to pump out yet more money.
@MoneyPig The stupidest is governments wanting to send out more checks because of inflation...
Joe de Mencia profile picture
@MoneyPig those stimulus checks were but a drop of the overall liquidity that was pumped in. big guys cashed in (like they always do) while plebs got some measly handouts.
@MoneyPig Add Biden with Congress, wih the Dem Congress.
0xfc profile picture
Almost every house being listed in the last 30 to 60 days are now having their asking price lowered. It is funny to see them drop it 10K when it will have to drop at least 100K to move anytime soon.

Think about it. Someone buys a house for 330K in 2018-2019. Redoes the kitchen in splendid home depot style (sarcasm), paints the walls, hardwood floors get refinished, redo the bathrooms a bit (once again home depot quality), no central AC and now expects a 10K price cut to 570K to sell?

Give me a break. They want 300 dollars per sq foot for the home on a 10,000 sq ft lot in an old cow town a solid 40 plus minutes from downtown Boston.
superartus profile picture
@0xfc yeah it's crazy. In my area in California, we had 900sqft homes averaging about 600k in 2019. Then in 2021, they were averaging about 1mil. Today, they are trying to sell at 25 to 75k off. Good luck to them.
Mike2021 profile picture
Look at Home Price to Income Ratio, literally off the charts


Sad fact is home prices have actually kept increasing, because supply is so low.
@Mike2021 not just that there are more people entering the us. Housing/rent are going to be high forever. Just may alone over a quarter million. Over 1.5 million and last year 1.7m. They all need housing. We aren’t building enough to house all these people. I expect rent and house prices to eventually price out everyone but the rich

MoneyPig profile picture

Only 400k will enter the workforce next year. Check it out. Labor growth rate is plummeting. That is why unemployment is so low.
Boohoo. People are literally trying to sell houses- double the value or even triple the value in the span of pre covid versus post covid.
jasmine4657 profile picture
let the home price keep dropping. it never deserved that ultra high price. Let everything in the market have fair price before we can call the end of carnage.
DoubleBacon profile picture
@AppleTree666 why don't you think a “fair price” is determined between willing buyer and willing seller?
Gerrymander profile picture
@AppleTree666 actually, whatever someone is willing to pay is fair market price. Just sayin.
jasmine4657 profile picture
@DoubleBacon sure you can consider whatever price that is determined
between willing buyer and willing seller is fair. Hopefully you didn't buy those bubble stocks near end of 2021 when they were also
determined between willing buyer and willing seller..
Diesel profile picture
Looks like inflation is dying.
Everyone has become a landlord over last few years. People have overextended themselves buying 2-3 houses.
CaptainCapitalist profile picture
15% correction in home prices will be inevitable, wish pricing days by sellers are over but a housing crash is also unlikely.
Who Moved My Cheese profile picture
@CaptainCapitalist Foreclosures from the FOMO buyers who bought in at top prices will be coming soon. Especially as layoffs increase. CC debt will also be a major problem in the coming months.
@Mlon Eusk CC debt is looking like it is already maxed...
Dividend Seeker profile picture
I was surprised to see 10-11% for a year ago. Seemed high, I suppose I under-estimated how many contracts fall apart.
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