Cancellations of home purchase agreements up from a year ago
By ALEX VEIGA, Associated Press
The U.S. housing market is showing signs of trouble as home purchase agreements are falling through before finalization. In May, 6% of pending contracts to buy a home were canceled, marking the third consecutive month with an annual increase in cancelations, according to the National Association of Realtors. Additionally, Redfin’s analysis found that 14.6% of all pending sales in May fell out of contract, the highest percentage for the month of May since at least 2017.
This trend highlights how unexpected costs, changes in credit or financial status, or low appraisals can lead homebuyers to back out of deals, even after reaching an agreement with sellers. Lawrence Yun, NAR’s chief economist, attributed the higher cancelation rates to stock market fluctuations, consumer confidence constraints, and economic uncertainties.
The U.S. housing market has been in a sales slump since 2022 due to elevated mortgage rates and rising home prices. Despite existing home sales remaining slow in May, pending home sales increased 1.8% from the previous month and 1.1% from May last year, indicating potential future completed sales.
Redfin’s snapshot of pending U.S. home sales for the four weeks ending June 22 showed a 2.3% decrease compared to the previous year. Fannie Mae economists revised their outlook, expecting existing home sales to rise 2% to 4.14 million this year, down from the previously forecasted 4.24 million. However, they anticipate a 9.5% increase in home sales in 2026, driven by mortgage rates easing to 6.1%.
Despite these challenges, the housing market continues to navigate uncertainties, impacting both buyers and sellers. Stay tuned for further updates on the evolving real estate landscape.
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