Homebuyers are getting cold feet
DFW Housing & macro econ analyst Amy Nixon joins ‘Making Money’ to discuss the impact of big banks investing in residential real estate.
Would-be homebuyers are getting a case of cold feet as they confront still elevated mortgage rates and record-high housing prices.
New findings published by Redfin show that a growing number of buyers are backing out of deals to buy a house at the last minute because buying a home is more expensive than ever. About 56,000 home purchases were canceled in June – about 15% of homes that went under contract – the highest percentage of any June on record.
The median home sale price rose 4% in June to $442,525, the highest level on record. At the same time, the average 30-year mortgage rate was about 6.92%, more than double the pandemic-era lows.
HOME PRICES SMASHED ANOTHER RECORD IN JUNE AS SALES SLUMP
«Buyers are getting more and more selective,» said Julie Zubiate, a Redfin real estate agent near San Francisco. «They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to rationalize not getting everything on their must-have list.»
Homes in the Issaquah Highlands area of Issaquah, Washington on Tuesday, April 16, 2024. (Photographer: David Ryder/Bloomberg via Getty Images / Getty Images)
Still, there are some signs that home prices may soon fall.
The Redfin report showed that one in five homes for sale saw a price cut, the highest level of any June on record. It marks a notable increase from the 14.4% pace seen one year ago and is just shy of the 21.7% record set in October 2022.
There are a number of driving forces behind the affordability crisis.
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