In the housing market, more people are starting to back out of deals
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There are lots of indicators the housing market is slowing, including this: A growing number of would-be homebuyers are canceling contracts and backing out of deals.
More than 15% of deals fell through in August compared to 12% a year ago, according to new data from Redfin.
A 3% increase in the number of home sales falling through may not sound like much, “but that does represent hundreds of thousands of deals over the course of a year,” said Taylor Marr at Redfin, who also said that in some parts of the country, one in five sales are falling through.
“Mostly in the Sunbelt, so cities like Phoenix, Tampa, Vegas,” – places that people flocked to during the first couple years of the pandemic.
“We saw home prices rise really fast. Inventory levels were very low. There was massive panic to buy a home in these markets. And now it appears that the fever has broken,” said Ali Wolf with the housing data and consultancy firm Zonda.
There are a few main reasons more buyers are pulling out of contracts now.
“The home came back with too many problems. More inventory, fear of the market and qualification issues,” Wolf said.
That’s in part because some people who may have been able to afford to buy when mortgage rates were around 3% are priced out, now that they’re around 6%.
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