Home Purchases Fell Through at the Highest Rate in Nearly a Year in August
Some homebuyers got cold feet as mortgage rates hit the highest level in over two decades and prices continued to rise, but buyer demand and new listings have stabilized following months of declines.
Residential real estate deals are falling through at the highest rate in almost a year as high mortgage rates give homebuyers sticker shock.
Nationwide, nearly 60,000 home-purchase agreements were canceled in August, equal to 15.7% of homes that went under contract that month and marks the highest percentage since October 2022, when mortgage rates surpassed 7% for the first time in two decades.
The average interest rate on a 30-year-fixed mortgage was 7.07% in August. At one point last month, it hit 7.23%—the highest since 2001—sending the typical homebuyer’s monthly payment up significantly from last year.
Homebuyers are getting cold feet. Buyers get sticker shock when they see their high rate on paper alongside extra expenses for maintenance, repairs and closing costs. Many of them would rather back out, even if it means losing their earnest money deposit. A lot of sellers are also willing to let buyers slip away because they don’t want to concede to repair requests.”
Home Prices Post Biggest Increase in Almost a Year
The average selling price for a single-family home in RI rose 15% from $516,413 in August 2022 to $596,784 this past August. However, the total number of closed sales dropped 25% from 1,034 in August of 2022 to 790 this past August.
Activity in the housing market is sluggish due to rising mortgage rates, but prices remain high because the buyers who are out there are competing for a limited number of homes.
Home prices will likely remain elevated for the foreseeable future. The Federal Reserve still has more work to do in its battle against inflation, which means mortgage rates are unlikely to come down anytime soon. As long as rates remain high, homeowners will be reluctant to sell. And that lack of homes for sale will keep prices high because it means buyers are duking it out for a limited supply of houses.”
New Listings Tick Up Slightly, But Overall Housing Supply Remains at Record Low
New listings rose 0.8% from a month earlier in August—the second small uptick on a seasonally adjusted basis following nearly a year’s worth of declines—and were down 14.4% year over year.
New listings have likely bottomed out, most of the homeowners who feel handcuffed by high rates have already made the decision not to sell. That means many of today’s sellers are putting their homes on the market because they have to, in some cases due to divorce, family emergencies or return-to-office policies.
Still, the total number of homes for sale hit a record low in August, falling 1.1% month over month on a seasonally adjusted basis and 25% year over year.
Housing supply is at an all-time low because homeowners feel locked into their low mortgage rates; for many, selling their home and buying a new one would mean taking on a much higher monthly payment.
up from 5.23% a year earlier and a record low of 2.65% in 2021.
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I am a licensed Broker in RI & SE MA. I've been a professional Realtor for 42 plus years and I've had well over 1,300 property sales transactions during my career.
I am a Graduate of the Realtor Institute. There are only 304 out of close to 5,600 licensed agents and brokers in RI who earned the GRI designation. I am a Certified Residential Specialist. There are 92 agents who have earned their CRS designation. I am a Relocation Professional. There are only a few who have taken the courses to obtain this designation. I have also earned the Accredited Buyers Representative certification. There are only 162 that have the ABR designation. I have also obtained a E-Pro designation. This is for use of technology in real estate marketing. There are just 52 E-Pros in RI. And in early 2021, I earned the coveted SRES designation. Specialized real estate services for Seniors. There are 106 certified in RI and SE MA.
I am one of only 3 real estate agents in RI who hold 5 professional designations plus I am not just an agent, I am the ONLY Licensed Broker, which requires a higher level of training, experience, professionalism and success, out of the 3. I am dedicated to offer the very best service to all my buyer and seller clients.
I've also specialized in working with distressed properties and have sold many bank owned properties and short sales. I've sold over 200 of these hardship case properties in the past.
All of these designations are recognized by the National Association of Realtors.
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I can help you in all aspects of real estate in RI and nearby SE Mass., whether selling, buying, building or investing.
Please text or call me at 401-595-3886 or e mail me at [email protected] to answer any questions you may have.
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Steve Gillikin
Home Smart Professionals
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When you’re buying a home, you’ll need two types of inspections—one is the actual inspection, and the other is the appraisal. They seem similar at first glance because both, as you might guess, involve a walkthrough of the property. They have different purposes, however. The information obtained is also reported to different parties.
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