Homebuyers are canceling deals at the highest rate since the start of COVID

Hey! It’s Tuesday July 12, and today we’ve got news on real estate deals getting canceled, both by homebuyers canceling home-purchase agreements, and home builders reporting buyers canceling deals to buy new construction homes. The bright side? While only 20 percent of those surveyed in June thought it was a good time to buy a home, that’s up from 17 percent in May, an all-time survey low.

Homebuyers are canceling deals at the highest rate since the start of Covid

THE NEWS: About 60,000 home-purchase agreements were canceled in June 2022, or about 14.9 percent of all homes that went under contract throughout the month, according to a new report released Monday by Redfin. Such figures of canceled contracts have not been seen since early pandemic days in March and April 2020, when the number of contracts that fell through hit 17.6 percent and 16.4 percent, respectively. By contrast, 12.7 percent of contracts fell through in May 2022 and 11.2 percent fell through in June 2021.

BEHIND THE NEWS: Redfin’s analysis includes MLS data dating back to early 2017. The brokerage also pointed out in its report that homes that fall out of contract one month may have entered a contract in a different month, i.e., a property whose contract was canceled in June may have initially gone under contract in May. Read the full story here.

>> NUMBER OF THE DAY: 55% of builders report cancelation uptick from buyers in June <<

As recession looms, consumers see tide turning in favor of homebuyers

THE NEWS: Sellers still have the upper hand but the tide may be turning in favor of homebuyers even as worries about a potential recession weigh on consumer sentiment, according to Fannie Mae’s latest monthly National Housing Survey. It found that 81 percent of consumers surveyed in June thought the economy was on the wrong track — a record high since Fannie Mae began conducting the survey in 2010.

But for the first time since February, the share of consumers who think it’s a good time to buy a home increased from the month before. While only 20 percent of those surveyed in June thought it was a good time to buy — that’s up from 17 percent in May, an all-time survey low.

BEHIND THE NEWS: The HPSI distills six questions from the National Housing Survey that factor into home purchase decisions. In addition to whether they think that it’s a good or bad time to buy or to sell the HPSI factors in where consumers think home prices and mortgage rates are headed, how concerned they are about losing their jobs and whether their incomes are higher than they were a year earlier. Read the full story here.