The contract signed to purchase existing houses, known as pending sales, was weak in July compared to June, and was canceled at least at the highest rate since 2017.
The monthly pending home sales index from the National Association of Realters fell 0.4% in July, but was still 0.7% more than last year.
The mortgage rates were increasing slightly higher in July, which could be responsible for some drops. According to the mortgage news Daily, the average rate on the popular 30-year fixed hostage began by mid-July and then to 6.85% by mid-month and ended at 6.75% on July. This rate fell faster in August and is now sitting at 6.51%.
NAR chief economist Lawrence Yun said, “Even with a slight improvement in hostage rates, cheap housing and inventory, buyers still hesitate.” “Buying a house is often the most expensive purchase that people will make in their lives. It means that it is not a decision to go under the contract. Homebuits make it quickly.”
Not only the sales are decreasing, but buyers are canceling these contracts at a fast pace. Redfin, a real estate brokerage, found that 15% contracts were canceled in July, the highest rate since monitoring the metric in 2017. It is based on the redfin analysis of pending-selling data from MLS, a national database of listing.
The report found the most popular in Texas and Florida, especially high rates in San Antonio (22.7%), Fort Lauderdel (21.3%) and Tampa (19.5%).
According to the report, Redfin agents cited “cold feet”, as the primary reason buyers are out. Overall uncertainty are felt about the current status of the track economy with consumers.
A NAR survey of realtors found that just 16% said they expect an increase in buyer traffic in the next 3 months.
In the north-east and midwest, July sales fell from month to month, there were flat in the south and rose in the west.
Jake Crimle, senior economist at realtor.com, said, “It has been a ‘cruel heat’: buyers are squeezed with challenges of strength, while sellers slow down to adjust the expectations, causing the housing market to be trapped in neutral.” “Hostage rates also offered some relief in July.”
