Record number of homebuyers abandon transactions in July

According to a new report from Redfin, a record percentage of home purchases fell through as rising homebuying costs prevented transactions from going through.

Attribution: Redfin.

According to the Redfin analysis of MLS pending-sales data, roughly 58,000 home-purchase agreements made in the United States were canceled in the month of July alone, equating to a 15.3% portion of all pending American home sales. This is up from the 11.6% of pending sales cancelled from 2021, when many Americans grappled unemployment and rising prices toward the end of the year.

In addition, this datapoint represents the highest rate of home sale cancellations ever in the recorded history of Redfin's analysis, which start at 2017.

According to Redfin, pending home sales are getting increasingly revoked due to economic uncertainty among buyers from tariffs and inflation markers like July's PPI report, high real estate prices, and high mortgage rates (despite rates having decreased this year). But, home sales are rising, according to the same source.

Yet, Claire Boston and Allie Canal on Mind Your Money predict that while a September Fed rate cut is imminent, a mortgage cut is not on the horizon.

"The Fed cut 75 basis points over a couple of meetings and mortgage rates almost were at 7% by the end of the year up from 6%. So... really no guarantee that we will get any lower from here. And one thing I think is interesting is... we were saying mortgage rates, they react to these market factors. We have a bunch of economic data coming out in the coming weeks and that is the kind of stuff that... really moves mortgage rates and creates market volatility. So... I have heard from some economists maybe right now is as good as it gets..." said Boston during the video report from Yahoo Finance.

But, while mortgage rates are decreasing, they are still high for many. In 2020 and 2021, rates stood at 3-4%, far lower than today's 6-7%.

Also, real estate inventory remains low as demand exceeds supply, keeping prices high despite lower mortgages.