00:00Potential homebuyers are canceling their purchase agreements at a record rate, according to Redfin with their July 2025 data, showing more than 15 percent of homes that were under contract saw the buyer back out.
00:14Redfin attributes the record high to higher home prices, higher mortgage rates and economic uncertainty.
00:21Buyers have more options and can pull their offer for several reasons.
00:25In San Antonio, Texas, 22.7 percent of people who agreed to buy a home in July ended up canceling their contracts.
00:33That's nearly one in four deals that fell through.
00:36Other cities with high cancellation rates were Fort Lauderdale, Jacksonville, Atlanta and Tampa.
00:42Florida and Texas have seen a large supply of new homes, which gives buyers more options and flexibility.
00:47As a result, Redfin says some buyers feel comfortable canceling deals if they think they can find a better home.
00:55Now, in Florida specifically, buyers are also walking away due to fears about natural disasters like hurricanes and rising costs for home insurance and HOA fees, which make owning a home more expensive.
01:07In places like Nassau County, New York and Montgomery County, Pennsylvania, very few homebuyers canceled their purchase agreements as low as 5.1 percent in Nassau.
01:16Now, these areas had the lowest rates of canceled home deals among the cities Redfin analyzed.
01:21The housing market is beginning to change.
01:24Mortgage rates are decreasing, which might encourage more buyers to reenter the market.
01:29The Fed is expected to announce a rate cut in mid-September.
01:32Chen Zhao, head of economics research at Redfin, says we're already seeing those decreased rates.
01:38So the Fed is widely expected to cut their policy rate on September 17th when they meet.
01:44That rate cut has largely been priced in already.
01:48So that means that when they make that cut, mortgage rates won't fall any further unless that they signal even faster or more rate cuts in the future compared to what markets have priced in.
02:00But markets are expecting several cuts this year and several cuts next year already.
02:04And but that expectation of these cuts that are coming is what has allowed mortgage rates to drop a little bit already from that, like, you know, 6.8 range down to about six and a half right now.
02:17So it's not a ton of relief for homebuyers, but it is, you know, meaningful relief.
02:22At the same time, fewer homes could be for sale, which could make buyers feel more pressure to act quickly before options run out.
02:30Now, together, these shifts could lead to more competition and fewer canceled deals.
02:35For Shader News, I'm Lauren Keenan.
02:37If you want more on this story, download the Shader News app or visit san.com.
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