Home Sales Fell Through at a Stunning Rate in June
As if the home buying process wasn't already complicated enough.
Roughly 14.9% of all house-purchase agreements fell through in June, a new high since the start of the COVID-19 pandemic. These roughly 60,000 deals on homeownership were all previously under contract but were canceled, according to a report released Monday from real estate brokerage Redfin.
Redfin analyzed data from the last three years and found that June's 14.9% cancellation rate was unrivaled since March and April 2020, when the pandemic all but halted the housing market. The rate for May 2022 was 12.7%, and the rate for June 2021 was 11.2%.
By comparison, in March 2020 the rate was 17.6%, and int April 2020 it was 16.4%.
While there are many reasons why these deals may have fallen through, it's likely that rising inflation and mortgage rates have complicated the home buying process for many people. The Federal Reserve has increased interest rates three times this year in an attempt to tame inflation. The federal funds rate, which is the interest rate banks charge one another for borrowing and lending, now sits at a range of 1.5% to 1.75%
Mortgage rates, which are the percentages of interest a lender assigns to a homeowner loan, have also been rising. Both 15- and 30-year fixed mortgage rates have been increasing since the beginning of 2022, and even a slight increase in mortgage rates could cost a potential homeowner thousands of dollars.
Correction, 6:56 p.m. PT: This story initially misstated which month had the highest rate of home sales falling through. That mark belongs to March 2020, followed by April 2020 and then June 2022.