SELLERS TAKE NOTE: US HOMEBUYERS ARE BACKING OUT OF DEALS AT THE HIGHEST RATE SINCE THE START OF THE PANDEMIC
Around 60,000 home-purchase agreements in the U.S. fell through last month. That equates to 15% of all homes that went under contract in June. In fact, 15% was the highest cancellation rate since early 2020, when the COVID outbreak brought real estate transactions to a near standstill. What’s behind the sudden change in home buying behavior?
“Buyers are increasingly keeping rather than waiving inspection and appraisal contingencies. That gives them the flexibility to call the deal off if issues arise during the homebuying process.”
Easily the single biggest reason buyers cancel?
Fear of paying too much. Fannie Mae’s Home Purchase Sentiment Index registered a reading of 64.8 in June, marking its second-lowest reading in a decade. Notably, 68% of respondents believe it’s a good time to sell a home, while only 20% of respondents think it’s a good time to buy a home.
For a home to sell now, it is critical that it not be overpriced. Those who are still holding out for top dollar on their homes are watching the Days on Market statistic grow higher as buyers pass them by.
The only homes still selling for absolute top dollar are in turnkey condition, where there is still minimal inventory.