Higher mortgage rates and fears of a recession have taken hold. NBC 7’s Brooke Martell has the story.
A recent CNBC report shows that homebuyers across the country are backing out of home sales in the middle of transactions, in part due to higher mortgage rates and fears of a recession.
Texas, the southwest, and Northern California all saw an increase in cancellation rates for buyers on new-build homes in July compared to last year, according to surveys by John Burns Real Estate Consulting. Southern California, including San Diego County, saw the least. So, why?
“A majority of our sales are resale homes, and what is the reason for that? It’s the lack of arable land,” Michael Wolf, a realtor with Coldwell Banker West, said.
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Wolf explained buyers pulling out of contracts due to high interest rates would have happened as early as April, but that didn’t play out in the market locally due to the low inventory of new builds.
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Now, he says the market is shifting in a positive direction, calling today's real estate a fine seller’s market.
”We’ve really hit the peak inflation numbers that we’re going to hit this summer,” Wolf said.
However, potential buyers like Andre Marc, still need more time.
”I just have a fear that all the properties I find that fit my needs will be on the market and quickly be gone,” Marc said.
Marc, a San Diego renter, is frustrated by what the last year has been like in the housing market.
”We were running into situations with bidding wars, low inventory, houses that would sell within 24 hours,” Marc said.
Melanie Carroll, who recently moved back to San Diego, chose to rent because of the low inventory.
”With everything being so crazy and so hard to find, we thought we should at least be here for a while,” Carroll said.
However, Wolf says that inventory is increasing, especially compared to the beginning of the year, and the time to buy is now due to less competition.
”Buyers who are ready would be wise to take action now,” Wolf said.
