The real estate market is turning upside down as buyers are beginning to back out of deals leaving many sellers across the country desperate. This is a far cry from not too long ago when homes were at an all time high in demand with homes being sold at record prices. Many parts of the country are seeing cancellations on deals in escrow to buy homes. Recent data shows that more and more homes in purchase agreements are seeing contractual cancellations.
In some cases with higher interest rates, borrowers are now no longer qualified & or priced out of the market. For buyers across the country, the demand has been a shock to not only their exit strategy but also their future plans to buy a new home as well. This is much to do with the Federal Reserve’s recent Interest rate hikes which have shocked the housing market.
Homebuilders are seeing a higher cancellation rate as well. Some of the larger home builders have seen a cancellation rate from 6.6% all the way up to 11.8% in recent months — drawing concerns by many leading economists. As the market continues to change, look for the Federal Reserve to review its monetary policy more closely as pain sets in across the real estate market.
