US Housing News: Sales Drop to 9-Month Low
The surge in canceled deals and delistings is a sign of the changing dynamics in the US housing market, where buyers and sellers are struggling to agree on prices and terms. As the market continues to shift, it's likely that we'll see more sellers willing to make price cuts to get a deal done, while others hold out for higher prices.
Home sales in the US have declined to a seasonally adjusted average annual rate of 3.93 million in June, a nine-month low, as buyers and sellers disagree on prices and presale repairs, leading to a surge in canceled deals and delistings.
According to data from the National Association of Realtors, the number of canceled deals has increased, with 57,000 deals falling through, the highest share in June since 2017. Delistings, where sellers take their homes off the market without a sale, have also risen 47% in May from a year ago. The main reasons for canceled deals include disagreements over presale repairs and price disappointments, with sellers holding out for higher prices and buyers struggling to afford record-high home prices.
The shift in the housing market has led to a clear difference between motivated sellers and holdouts, with the latter able to wait for market prices to meet their expectations. Despite this, more sellers are willing to make price cuts to get a deal done than exit the market altogether. The trend is most prominent in cities with higher inventory levels, such as Jacksonville, Fla., Phoenix, Miami, and Riverside, Calif. Realtors are getting pickier about the sellers they represent, looking for those with strong motivation to move.
The US median home price has reached a record high of $435,300 in June, up 2% from last year, despite a historic low in home sales. With mortgage rates above 6.5%, monthly payments for a median-priced home with a 20% down payment and a 30-year fixed-rate mortgage now exceed $2,273, making high costs a norm for buyers. As the housing market continues to evolve, it remains to be seen how buyers and sellers will adapt to the changing landscape.