Roughly 60,000 home purchase agreements were canceled in August, representing 15.7 percent of the homes that went into contract last month, according to a report from Redfin. The cancellation rate is the highest since October.
October is when rates tipped past 7 percent for the first time in 20 years. Since then, the average rate for a 30-year fixed-rate mortgage has hovered around that mark but often below it. Then, in August, the average rate was 7.07 percent and it peaked at 7.23 percent, a 22-year high.
Redfin Premier real estate agent Jaime Moore said buyers were getting “sticker shock” in the face of rising mortgage rates and expenses they may not have accounted for, such as maintenance, repairs and closing costs.
Moore added that sellers are sometimes satisfied in letting buyers cancel their contracts rather than concede to buyers’ repair requests. Buyers with a mortgage contingency in their deals can also get out of them without penalty if they cannot obtain a home purchase loan.
Of the 50 most populous markets tracked by Redfin, the cancellation rate was highest last month in Jacksonville, where 26.6 percent of contracts were scuttled. San Francisco lived on the other end of the spectrum, sporting only a 6.4 percent cancellation rate.
Nationally, the median home sale price rose 3 percent year-over-year in August, the largest annual jump since October. Buyer demand remained below pre-pandemic levels but prices were sustained because overall housing supply remained at historic lows.
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Rising mortgage rates and extra expenses are leading more homebuyers to cancel signed contracts, even if it means losing deposits put down for the deals. Roughly 60,000 home purchase agreements were canceled in August, representing 15.7 percent of the homes that went into contract last month, according to a report from Redfin. The cancellation rate
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Robert Khodadadian has long had a simple philosophy about selling real estate. There are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller.