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By Giulia Carbonaro
Senior Reporter
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Pending home sales were canceled in San Antonio, Texas, at a higher rate than any other U.S. city during October, according to a new report by real estate brokerage Redfin.
Buyers in the city backed away from more than a fifth (21 percent) of all expected sales that month, 2 percent up year over year.
Why It Matters
The number of Americans backtracking from home purchases is on the rise all across the country, as buyers either realize they cannot afford such an expense in the current economy or suspect they can get a better deal elsewhere, as inventory has risen nationwide in recent months.
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At a national level, 15.1 percent of all pending sales fell through in October, up from 14.3 percent a year earlier.
This phenomenon, however, is much more pronounced in the Sun Belt, which experienced a boom in demand during the pandemic but is now, in many markets, facing a glut of inventory as sales have dwindled due to affordability issues and lower domestic migration.
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What To Know
Roughly 53,000 home-purchase agreements in total were canceled in October across the U.S, according to Redfin. But the highest number of cancellations in the country were reported in these ten U.S. metropolitan areas, which had the highest shares of pending sales fall through in October:
- San Antonio, Texas: 21.0 percent
- Fort Lauderdale, Florida: 20.0 percent
- Fort Worth, Texas: 19.7 percent
- Las Vegas, Nevada: 19.2 percent
- Jacksonville, Florida: 19.2 percent
- Tampa, Florida: 19.1 percent
- Orlando, Florida: 19.1 percent
- Atlanta, Georgia: 18.7 percent
- Dallas, Texas: 18.0 percent
- Riverside, California: 17.9 percent
Texas and Florida, where demand for homes soared during the pandemic, are overrepresented in this list.
That is because these two states not only became red-hot during the pandemic, but also initiated a construction boom that, once the home-buying frenzy waned, left an oversupply of homes on the market right as the number of those wanting to buy, or able to afford them, was dwindling.
On the other hand, the lowest cancellation rates were reported in Nassau County, New York (4.4 percent), San Francisco (4.6 percent), San Jose (7 percent), and Oakland (9.1 percent) in California and Montgomery County, Pennsylvania (9.2 percent).
What People Are Saying
Tracy Edwards, a Redfin Premier real estate agent in Winston-Salem, North Carolina, told Redfin: "Buyers know they have options, so if a seller isn’t willing to address a maintenance issue, the buyer will walk away. A lot of sellers are having to adjust their expectations—some still think their home is worth more than the market will bear."
What Happens Next
Redfin expects affordability in the U.S. housing market to gradually and slowly improve next year, luring more buyers back from the sidelines.
While this is expected to increase sales, Redfin said that a lot of American buyers—especially younger people—would continue finding home-buying and homeownership unaffordable.
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