'Market Crashing Before Our Eyes': Buyers Are Backing Out Of Deals In Record Numbers Amid Relentlessly High Interest Rates

Power up the flux capacitor, climb aboard your DeLorean and prepare to travel back to 2008 because recent headlines concerning a real estate market crash seem very familiar.

The main differences between today’s imploding market and that of 17 years ago were that in ’08, bad mortgages and over-inflated house prices were the issue. Today, high interest rates, soaring insurance costs, economic fears, and stubborn inflation are the primary problems. The results, however, are pretty similar — much of the U.S. is becoming a buyer’s market, according to a recent report by Redfin RDFN.

Don't Miss:

Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — you can become an investor for $0.80 per share today.
Inspired by Uber and Airbnb – Deloitte's fastest-growing software company is transforming 7 billion smartphones into income-generating assets – with $1,000, you can invest at just $0.30/share!

Today's Best Finance Deals

14% Of All Transactions Were Canceled In April

The numbers are shocking. In April, 56,000 home purchase contracts were canceled — just over 14% of all pending transactions, Redfin reports. Not since the early days of the pandemic have so many deals failed to get to the finish line.

“We see a lot of deals collapsing, especially in major markets like Las Vegas and Phoenix,’ Joel Efosa, the CEO of Fire Cash Buyer, told the Daily Mail.” It’s especially first-time buyers. Some are losing their jobs, others simply no longer qualify for loans because they don’t make enough or have good credit.” He noted: “Realtors are asking sellers to accept the truth — the market is crashing before our eyes.”

Prices have fallen year-over-year from April to the same time last year in 20 major metro areas, Zillow's Home Value Index shows. Most of the declines have occurred in Sunbelt states, such as Arizona, Texas, Florida, and Louisiana, which have followed a similar pattern to 2008.

Trending: This Jeff Bezos-backed startup will allow you to become a landlord in just 10 minutes, with minimum investments as low as $100.

However, Zillow reports that the Northeast has yet to tip into a buyer’s market, where sellers still have the upper hand in cities like Buffalo, New York; Boston; Hartford, Connecticut; and Providence, Rhode Island. In these markets, there are at least 10 engaged home shoppers for every listed home.

Tariffs And Recession Talk Has Buyers Pressing Pause

The ongoing discussion of tariffs and increasing concerns about higher prices for food, furniture, construction, cars, and more are keeping potential buyers on the sidelines.

“They’re hearing the words’ tariffs’ and ‘recession,’ and it’s making them nervous that if they buy now, the value of their home will decline, and they don’t know whether mortgage rates will go up or down,” Desiree Bourgeois, a Redfin realtor in Detroit told the Daily Mail, “There’s a lot of uncertainty out there, with buyers trying to understand how their purchase would fit into their personal finances and the broader economic puzzle.’

See Also: Invest Where It Hurts — And Help Millions Heal: Invest in Cytonics and help disrupt a $390B Big Pharma stronghold.

Florida Is A Bellwether State

Florida has proven to be a bellwether state for the housing market. In 2008, the oversupply of homes, many of which were purchased by unqualified buyers with subprime mortgages, led to massive foreclosures. Now, a halt to inbound migration, coupled with extreme weather and soaring costs associated with insurance and homeowners’ fees, has led to an abundance of homes sitting on the market.

Current listings in Miami-Dade County, which includes one of the most expensive metro markets in Florida and the country, rose by over 42 percent in the first week of June compared top the same time last year, according to The MIAMI Association of Realtors.

“If these buildings are subject to reserve requirements, buyers want to make sure they’re getting into a situation where the condos have their act together,” Brad O’Connor, chief economist at trade group Florida Realtors, told The Wall Street Journal. “Whether it’s the lenders or the buyers themselves, we’ve seen a slowdown in condo demands.”

Read Next: