A staggering 60,000 Americans canceled their home purchase agreements in July, driven by soaring prices and apprehensions surrounding the upcoming US presidential election, Fox Business reports.
The wave of cancellations represents 16% of all homes that were under contract during the month, according to a new report by real estate brokerage Redfin.
While existing home sales saw a slight month-over-month increase, they still marked the lowest number for July in recorded history. Redfin reported a 0.6% rise in sales from June, but a 2% decline year-on-year, bringing the seasonally adjusted annual rate to 4,094,991 sales—the lowest total since the firm began tracking records in 2012.
Lily Katz, an analyst at Redfin, noted that pending sales also plummeted, hitting the lowest monthly level since April 2020 at the onset of the coronavirus pandemic.
Despite a recent drop in the average interest rate on a 30-year mortgage, which fell to 6.49% from a peak of 7.22% in May, many potential homebuyers remain hesitant. Increasing home prices continue to present a barrier to entry, with the median sale price rising 4.1% year over year in July, now standing at $439,170.
“A lot of people are also concerned about the political climate. They can afford to buy but have been holding off because it’s unclear where the country will be in six months,” Nicole Stewart, a Redfin real estate agent in Boise, Idaho, said.
Despite these concerns, the outcome of the presidential election may not significantly influence the housing market.
In more promising news for buyers, the inventory of homes available for sale increased by a substantial 14% last month. Redfin sees this rise in supply as a potential opportunity for buyers, allowing them greater choices and improved leverage in negotiations.
As the market navigates these uncertainties, experts suggest that buyers should weigh their options carefully while keeping an eye on future developments in both interest rates and the political landscape.
