About 60,000 home-sale agreements fell through nationwide in June, according to Seattle-based Redfin, marking the highest percentage (14.9) since March and April of 2020, when the housing market nearly came to a complete halt due to the start of the COVID-19 pandemic.
“The slowdown in housing-market competition is giving homebuyers room to negotiate, which is one reason more of them are backing out of deals,” Redfin Deputy Chief Economist Taylor Marr said in the brokerage's press release. “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.”
Marr added rising mortgage rates have also forced buyers to cancel home purchases. In some cases, rates stood at 5 percent when a buyer made an offer but rose to 5.8 percent when it was time to lock in the rate after getting under contract with the seller, Marr said.
"The housing market has cooled in recent weeks as the Federal Reserve has boosted interest rates in an effort to quell inflation," Redfin's release said. "That has given house hunters more freedom to seek concessions from sellers, but higher rates also make housing less affordable. Buyers did get a reprieve this past week, when the average 30-year fixed mortgage rate fell to 5.3% in the largest one-week drop since 2008."
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