This is not an exodus, but new‑old realities of the U.S. real‑estate market
About 13,6% of real‑estate sales transactions in the United States were cancelled in May, according to Redfin data.
The percentage of voided contracts has stayed at a similar level for two years, ranging from 13.4% to 14%.
Importantly, this corresponds to almost 50 thousand cancelled contracts.
“The fact that the number of voided contracts has stabilized nationwide suggests that while financial accessibility issues still deter some buyers, others have adjusted to higher mortgage rates,” the report reads.
“The number of cancelled contracts slightly fell compared to the peak level of 2023, as buyers and sellers are entering transactions with more realistic expectations,” it added.
The ongoing buyer‑market allows price negotiations, which are especially important for Americans whose financial resources are insufficient to cover rising housing costs.
“Transactions are falling apart more often than in 2020–2022, when the U.S. market was extremely hot and seller‑friendly. This is because there are hundreds of thousands more homes for sale than buyers, giving buyers the option to walk away if they find a home they prefer,” the report said.
People looking for homes, according to Redfin data, are increasingly abandoning large purchases due to financial instability caused by geopolitical turmoil such as the Middle East war.
Equally important are economic uncertainty, inflation‑growth risk, and job insecurity.
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In Atlanta, 18.8% of real‑estate purchase contracts were voided in May, the highest rate among the 50 most populous U.S. metro areas.
The other four cities were Fort Worth, Texas (18.1%), Jacksonville, Florida (17.9%), San Antonio (17.8%) and Orlando, Florida (17.7%).
Contract cancellations were least common in San Francisco, where last month only 3.9% of transactions fell through.
Source: Redfin.
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Fed pause. Upcoming changes at the central bank
During the June meeting of the Federal Open Market Committee, it was decided to keep interest rates in the range 3.5-3.75%.
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Kevin Warsh, who chaired the Fed meeting for the first time, announced a series of changes at the central bank that will also affect how policymakers communicate with consumers.
The future path of monetary policy, marked by a certain degree of uncertainty, does not favor the purchasing plans of Americans who have so far held back from buying property.
“Markets need some time to fully absorb the scope of the meeting, but the hawkish tone in the committee’s forecasts will keep mortgage rates high for now,” said Chen Zhao, director of economic research at Redfin.
“Neither the president nor the committee are interested in meeting the White House’s expectations for rate cuts in the current inflationary environment,” she added.
Source: Trading Economics.
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Source: Redfin.
