The Big Cancel
The housing market, a key part of our economy, is facing mortgage issues despite the two-year period of perfect conditions we’ve had for homeowners across America, with last month’s mortgage applications falling to their lowest levels in more than twenty years! This mortgage issue, along with a scarcity of homes up for sale, is causing a shift in inventory of houses that economists aren’t too unhappy about as it’s reverting to the mean. According to analyst Logan Mohtashami, this will help control pricing power and keep prices in check, and the inventory argument is solid as levels have risen by 10 percent in the last 2 months.
Recently, Americans have been canceling their deals to buy homes at the highest rate since the start of the Covid pandemic. Indeed, when looking back, the share of sale agreements on existing homes canceled in June was just under 15% of all homes that went under contract. That is the highest share since early 2020, when homebuying paused immediately, albeit briefly.
With so many cancellations coming in, where do you think the real-estate market is headed and will you be investing any time soon?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.