In another sign that the housing market is cooling, nearly 15% of home sales fell last month, according to new analysis from Redfin – the highest number since the early days of the pandemic.
The housing market has been so frenetic over the past two years that it has become common for potential buyers to forgo things like home checks.
But Moira Holley, a broker in Seattle, said mortgage rates were up and fewer people were looking, so “the inspections are back. And in some cases… financing contingencies” – which allow a buyer to walk away from a sale if they can’t get a loan.
Redfin’s Daryl Fairweather said more buyers had financing possibilities in June than in January.
“And that means if the mortgage rate goes up, they could go to the seller and say, ‘I can’t afford this house’…and they’ll be rented out without penalty,” she said.
She said that’s likely a big part of why more sales fell last month.
Ali Wolf of housing data and advisory firm Zonda said some particularly hot markets in the mountain west, southeast and southwest are cooling the fastest.
“What we’re seeing in some of these markets is that consumers actually have a price cap,” she said.
Now that record home prices are bumping up against higher mortgage rates, many potential buyers have reached that ceiling.
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