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Record Number of Americans Rip Up Their Home Deals With Two Issues to Blame

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A record 60,000 Americans have ripped up their home deals in July, citing high prices and fears about the upcoming U.S. presidential election.

While existing home sales rose slightly last month, they were still the lowest July level on record, according to a new report from real estate brokerage Redfin.

“Sales of existing homes rose 0.6% month over month in July but fell 2% year over year—to a seasonally adjusted annual rate of 4,094,991. That’s the lowest July level in records dating back to 2012,” Redfin’s Lily Katz wrote.

The technology-powered real estate firm noted pending sales also fell to the lowest level of any month on record aside from April 2020, when the COVID-19 pandemic first impeded transactions and the supply chain.

While the average interest rate on a 30-year mortgage has dropped to 6.49%, down from its 7.22% peak in May, many homebuyers are waiting to see if rates drop further. Homebuyers are also concerned about home prices, which still sit near their record high. (Read more from “Record Number of Americans Rip Up Their Home Deals With Two Issues to Blame” HERE)

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Investors Flee the Housing Market in Troubling Sign for the Economy

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Investors bought 30% fewer homes in the third quarter of 2022 compared to the same time period last year, as high borrowing costs pressured investors out of the housing market, according to real estate brokerage Redfin Tuesday.

Besides a brief plunge in the second quarter of 2020 in response to the beginning of the coronavirus pandemic, the decline was the steepest since 2008, and surpassed the 27.4% overall decline in home purchases nationwide, Redfin reported. The pandemic ultimately boosted demand for homes in suburban areas, sending investors on buying spree as they raised rents in those areas, in some cases by double digits, The Wall Street Journal reported Tuesday. (RELATED: Mortgage Payments Surge 50% Since Last Year As Homebuyers Get Priced Out)

The average 30-year fixed mortgage rate was 6.61% for the week ending Nov. 17, 2022, more than double the 3.10% rate set for the week ending Nov. 18, 2021, according to Freddie Mac. Until the Federal Reserve eases its aggressive campaign of interest rate hikes designed to combat inflation, rates are unlikely to return to their pandemic-era levels.

“It’s unlikely that investors will return to the market in a big way anytime soon. Home prices would need to fall significantly for that to happen,” Redfin Senior Economist Sheharyar Bokhari said in Redfin’s press release. “This means that regular buyers who are still in the market are no longer facing fierce competition from hordes of cash-rich investors like they were last year”

(Read more from “Investors Flee the Housing Market in Troubling Sign for the Economy” HERE)

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Home Prices Plunging in ‘Pandemic Boomtowns’ as Market Slumps

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Homeowners in markets that boomed when the real estate sector was red-hot during the COVID-19 pandemic are now forced to slash prices due to dwindling demand, according to data released Monday by Redfin.

Across the US, 21% of home sellers dropped their asking prices in July – the highest share since Redfin began tracking the metric in 2012, according to the firm. The shares of homes with price drops in July compared to one year ago increased in 94 of 97 metro areas surveyed.

The trend was at its worst in “pandemic home-buying boomtowns” such as Boise, Idaho, where a whopping 69.7% of homes for sale slashed listing prices in July. Other overheated markets included Denver, with a 58% of price drops, and Salt Lake City, with a 54.8% share of cuts.

“Individual home sellers and builders were both quick to drop their prices early this summer, mostly because they had unrealistic expectations of both price and timelines,” Boise-based Redfin agent Shauna Pendleton said.

“They priced too high because their neighbor’s home sold for an exorbitant price a few months ago, and expected to receive multiple offers the first weekend because they heard stories about that happening,” Pendleton added. (Read more from “Home Prices Plunging in ‘Pandemic Boomtowns’ as Market Slumps” HERE)

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