1 in 7 US Home Purchase Deals Were Canceled in April: Redfin
Around 56,000 agreements to purchase homes were canceled across the United States last month amid an environment of economic uncertainty and high housing costs, according to real estate brokerage Redfin.
The canceled agreements made up one in seven (14.3 percent) of homes that went under contract in April, higher than 2024's 13.5 percent, Redfin said in a May 22
'Redfin agents report that some buyers are getting cold feet due to widespread economic and political uncertainty. Tariffs, layoffs, and federal policy changes are among the factors prompting people to stay put instead of move,' the brokerage said.
The downturn in buyer sentiment is happening as the housing inventory is at a five-year high.
Despite adequate supply, demand is slowing, 'meaning the buyers who are in the market often have room to negotiate,' Redfin said. 'Some house hunters are backing out during the inspection period because a better house has or might come along.'
Meanwhile, both home prices and mortgage rates remain 'stubbornly high,' the company said.
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The average sales
Among the 44 major U.S. metropolitan areas analyzed by Redfin, Atlanta ranked first in terms of canceled deals, with one in five pending home sales falling through last month. This was followed by Orlando, Tampa, Riverside, and Miami in Florida.
In a May 22
On the plus side, 'the pullback will likely be short-lived with Zillow anticipating 4.12 million home sales in 2025—that's 1.4 percent higher than in 2024,' it said.
'Zillow data confirms a small rebound in the number of homes going under contract in the first two weeks of May. The early May data suggests that perhaps this year's peak home shopping activity may have been delayed.'
Housing Affordability
According to the National Association of Home Builders (NAHB)/Wells Fargo Cost of Housing Index, a family making $104,200—the nation's median annual income—had to set aside 36 percent of their earnings to meet mortgage payments on a median-priced new home in the first quarter this year, NAHB said in a May 22
'The Cost of Housing Index clearly shows the need for policymakers to take action to address the nation's housing affordability crisis by enacting policies that will allow builders to increase the nation's housing supply,' said NAHB Chairman Buddy Hughes.
'Eliminating burdensome regulations, ending tariffs on Canadian lumber and other building materials, providing funding to promote careers in the skilled trades, and expediting approvals for affordable projects will allow builders to construct more homes.'
Meanwhile, there is uncertainty as to how low mortgage rates could fall given the recent downgrade of the United States' credit rating by Moody's.
The rating agency
The weekly rate on a 30-year fixed-rate mortgage has risen consecutively for the past two weeks and was at 6.86 percent for the week ending May 22, the highest level since around mid-February.
In a May 22
'Pent-up housing demand continues to grow, though not realized. Any meaningful decline in mortgage rates will help release this demand.'
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