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Cities where homebuyers are backing out of contracts

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Amid rising mortgage costs, the number of homebuyers withdrawing has risen to record levels in the past three months. Especially he found new data in a city that was a real estate hotspot until 2021.

In August, about 15.2% of U.S. home-buying deals were closed, and have remained above 15% for the past two months. New data from Redfinan online real estate broker.

Aside from a brief period early in the pandemic (where the rate spiked to 17.2%), the past three months have seen the highest contract cancellation rates on record. Usually the rate is around 12%.

Cancellation rates are even higher in some cities, with 20% of buyers canceling purchase commitments in 10 of the country’s 50 most populous metropolitan areas. Let’s take a look at these real estate markets ranked in descending order of cancellation rates.

  1. Jacksonville, Florida: 26.1%
  2. Las Vegas: twenty three%
  3. Atlanta: 22.6%
  4. Orlando, Florida: 21.9%
  5. Fort Lauderdale, Florida: 21.7%
  6. Phoenix: 21.6%
  7. Tampa, Florida: 21.5%
  8. Fort Worth, Texas: 21.5%
  9. San Antonio, Texas: 21.1%
  10. Houston: 20.6%

Cities in the Southeast and Southwest Sunbelts dominate the rankings, with Jacksonville, Florida, taking first place overall.

These Sunbelt cities were some of the most popular destinations early in the pandemic. People were moving away from the Northeast and parts of California For cheaper listings elsewhere in the US

However, due to the influx of new buyers, the rate of increase in house prices is Many of these markets are showing double-digit growth Since 2020. Median home prices are rising in Jacksonville. From about $200,000 to over $300,000 In the last three years alone, according to Redfin data.

Add to this the soaring mortgage costs, which have nearly doubled since the beginning of 2021, and many buyers are pulling prices out of the market, the study said. It’s also possible that some buyers are pulling back on deals as they wait to see if home prices drop, the study suggests.

On the other hand, large coastal hubs like San Francisco and New York had the lowest cancellation rates, below 10%. Home price growth in both cities has remained flat over the past three years compared to many Sunbelt markets, which may explain the relatively low ranking.

Contracts often take weeks to complete and can be canceled for a variety of reasons, including rising funding costs. Redfin tracked canceled contracts through 2017 using data provided by the National Association of Realtors.

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