U.S. homebuyers are canceling deals at a historic pace, with 14.5% of home-purchase agreements falling through in September, while completed existing-home sales recorded a modest monthly increase.
In a post on X on Tuesday, market commentator The Kobeissi Letter cited Redfin data showing September cancellations reached the highest rate for any September on record. "US homebuyers are canceling deals at a historic pace," it said.
Homebuyer Cancellations Hit September Record
Redfin’s report, published Monday, found that 14.5% of homebuying deals that went under contract in September — about 1 in every 7 — were canceled. Only March and April 2020 recorded higher readings.
The cancellation rate never exceeded 12% between 2017 and 2019. Jacksonville recorded the highest rate among major U.S. metros at 19.9%, followed by Tampa at 18.8%, Las Vegas at 18.6% and San Antonio at 18.5%.
The Kobeissi Letter also said home sellers outnumbered buyers by about 63% in September, the widest gap on record.
Redfin attributed the high cancellation rate to buyers having more options in a strong buyer’s market. Buyers may walk away because of inspection problems, unexpectedly high monthly payments, or a change of mind.
Pending home sales fell 4% month over month in September, the biggest monthly decline in more than three years. Redfin said mortgage rates climbed above 7% by the end of the month, adding to affordability pressures.
Redfin’s head of economic research, Chen Zhao, said mortgage rates above 7% are making homes less affordable, but reduced competition is giving buyers more negotiating power on prices, repairs and closing costs. Zhao also said slower sales could cause home prices to flatten or fall, advising sellers to price realistically and offer concessions to attract buyers.
NAR Data Shows Existing-Home Sales Rose
A separate report released Tuesday by the National Association of REALTORS showed existing-home sales increased 1.5% month over month in September to a seasonally adjusted annual rate of 3.99 million. Sales were still down 2.2% from a year earlier.
Housing inventory rose 1.9% to 1.60 million homes, while the median existing-home price increased 1.3% year over year to $417,500.
NAR Chief Economist Lawrence Yun said August and September were the two slowest months for home sales this year despite September’s monthly increase. He also warned that further mortgage-rate increases could leave fewer buyers able to qualify for a home loan.
Disclaimer: This content was produced with the help of AI tools and was reviewed and published by Benzinga editors.
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