Introduction to the Current Real Estate Market
Homebuyers are canceling their planned purchases at a record rate across the United States — and Fort Lauderdale was among the areas where those agreements were most likely to fall through, a new report says.
About 58,000 home-purchase agreements were canceled last month in the U.S., the highest July rate on record, according to recent data from Redfin, a real estate data and service provider. This amounts to about one in every seven U.S. home sales.
Factors Contributing to Cancellations
Out of more than 44 of the U.S.’s most populated metro areas, Fort Lauderdale was one of two in Florida that had more cancellations this year than at the same time last year.
Fort Lauderdale in July had 21.3% of pending sales that fell out of contract, up from 20% in July last year. Jacksonville had only slightly more cancellations this year, with 19.9% in July this year compared with 19.8% in July 2024.
Redfin analysts said there are many contributing factors, including:
— High home prices.
— High mortgage rates.
— High inventory.
— Natural disasters, such as hurricanes.
Also playing a role is uncertainty.
Real Estate Agents’ Perspectives
“I recently had an older first-time buyer get cold feet the week before the deal was supposed to close,” Redfin premier real estate agent Bonnie Phillips said in a news release. “It was a beautiful house. We got it for the price she wanted, and there were no issues in the inspection. But her neighbors convinced her that owning is too much of a hassle and she should rent instead.”
George Colony with Keyes Realty hasn’t experienced a wave of cancellations himself, but said some would-be buyers in the U.S. are lacking confidence in their purchases.
“It would be simple if I could say, ‘Here’s your down payment, and here’s your monthly payment a month if you buy this home.’ They can’t count on that though, can they?” Coloney said. “Because insurance rates go up, taxes are going up, so you can’t ever get your feet square on the ground as far as how long will I be able to do this?
“Can I do it to start with? The prices are out of sight here.”
Market Trends and Prices
Coloney recalled the hardships faced during the Great Recession many years ago, after losses on subprime mortgages led to a housing market crash.
“Nobody had any money and the prices were low. Today, people got money, but the prices are high, so people are listing their houses, and it’s not realistic, especially when it comes to any investment-type property,” he said.
Last month, the median sale price for a single-family home was $620,000 in Broward County and $613,250 in Palm Beach County, according to the Broward, Palm Beaches & St. Lucie Realtors. These figures have slightly dipped since July 2024, which could be in part because the number of active listings has increased in both counties.
In Broward County, the inventory of single-family homes went up by about 31% and 26% for townhomes and condominiums. In Palm Beach County, the inventory of single-family homes went up by 16% and nearly 15% for townhomes and condos. These supply upticks also help explain the cancellation trend.
Conclusion
The current real estate market is experiencing a significant number of cancellations, with Fort Lauderdale being one of the areas most affected. The main factors contributing to this trend are high home prices, high mortgage rates, high inventory, and natural disasters. Additionally, uncertainty and lack of confidence among buyers are also playing a role. As the market continues to evolve, it is essential for buyers and sellers to be aware of these factors and to adjust their strategies accordingly.
FAQs
Q: What is the current rate of home-purchase agreement cancellations in the U.S.?
A: According to recent data from Redfin, about 58,000 home-purchase agreements were canceled last month in the U.S., the highest July rate on record.
Q: What are the main factors contributing to the cancellation trend?
A: The main factors contributing to the cancellation trend are high home prices, high mortgage rates, high inventory, and natural disasters, as well as uncertainty and lack of confidence among buyers.
Q: How has the inventory of single-family homes changed in Broward and Palm Beach counties?
A: In Broward County, the inventory of single-family homes went up by about 31% and 26% for townhomes and condominiums. In Palm Beach County, the inventory of single-family homes went up by 16% and nearly 15% for townhomes and condos.
Q: What is the median sale price for a single-family home in Broward and Palm Beach counties?
A: According to the Broward, Palm Beaches & St. Lucie Realtors, the median sale price for a single-family home was $620,000 in Broward County and $613,250 in Palm Beach County.
