States in the Sun Belt, which includes the traditionally sunny southern part of the US, attracted an influx of home buyers during the pandemic, ultimately driving up prices and competition. However, the market is shifting and the once sought-after cities are seeing a significant slowdown.
Dates from redfin found that 64,000 home sales fell through in August, or about 15.2% of total contracts signed that month. That is more than 12.1% of the contracts that did not go through in August 2021. According to the data, homebuyers in Sun Belt cities like Phoenix, Jacksonville and Las Vegas would most likely pull out of deals. In coastal cities like San Francisco and New York, where there are still competitive housing markets, buyers retreated the least. It’s unclear why homebuyers are retreating en masse, but a slowing market could be a factor as buyers prefer to wait to see what else is out there.
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“House hunters today are taking their time and researching their options, whereas six months ago they had to act fast and pull out all the stops to compete as homes sold almost immediately,” said Tzahi Arbeli, a Redfin real estate agent in Las Vegas. the company said. “Home buyers will now agree to buy a home and do the inspection, then go back because they found another home they like more.”
Rising interest rates could also be a factor. The average 30-year fixed mortgage rate reached 6.29% this month, the highest since 2008. This may prompt homebuyers to reconsider their decision as rates are significantly higher than when they were first approved for their loans.
Jacksonville, FL saw the most home buyers back in August at 26.1%. Next were Las Vegas at 23%, Atlanta at 22.6%, Orlando, FL at 21.9%, Fort Lauderdale, FL at 21.7%, Phoenix at 21.6%, Tampa, FL at 21.5%, Fort Worth, TX at 21.5%, San Antonio at 21.1% and Houston at 20.6%.
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