Home Buying Deal Cancellations Set June Record - Redfin

(RTTNews) - Cancellations of house purchase deals in the U.S. hit a record for the month of June as buyers got cold feet due to high housing costs, a report from the real estate brokerage website Redfin showed Tuesday.

Nearly 56,000 home-purchase agreements were canceled in June, which was equal to 14.9 percent of homes that went under contract that month-the highest percentage of any June on record, Redfin said.

The median house price rose 4 percent year-on-year in June to a record $442,525, the report added.

The average interest rate on a 30-year mortgage was 6.92 percent, which was down from 7.06 percent in May, but still more than double the all-time low hit during the pandemic, Redfin said.

The number of houses sold decreased a seasonally adjusted 0.5 percent month-on-month, the biggest fall since October last year, to 417,179 units. The figure was down 1.1 percent from a year ago.

Buyers who are waiting on the sidelines in hopes that mortgage rates will drop even more may be doing so in vain as rates are unlikely to fall much in the next few months, and markets have already priced in a September rate cut, Redfin Economics Research Lead Chen Zhao said.

The number of houses on the market was largely unchanged from the previous month at around 1.64 million. However, the total was 12.8 percent more than what it was in the same month last year.

The share of houses for sale that received a price drop grew to a record 19.8 percent in June, up 14.4 percent a year earlier and was just shy of the 21.7 percent record high set in October 2022.

"Buyers are getting more and more selective," Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, said.

"They're backing out due to minor issues because the monthly costs associated with buying a home today are just too high to rationalize not getting everything on their must-have list."

The Redfin report also showed that three Florida metros led the nation in home-purchase cancellations.