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Sun Belt Buyers Are Backing Out of Home Purchases

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Housing Markets

Sun Belt Buyers Are Backing Out of Home Purchases

Homebuyers in popular Sun Belt cities are second guessing home purchases amid surging mortgage rates and slower activity from competing buyers

September 27, 2022
Phoenix suburb with city in background
Image: Stock.adobe.com

House hunters flocked to Sun Belt cities like Phoenix, Tampa, and Las Vegas throughout the pandemic, going toe to toe for available properties and driving up regional prices to record highs, but as borrowing costs surge and the housing market cools, those metros are among the first to see a drop in home sales. Roughly 64,000 home-purchase agreements fell through in August, accounting for 15.2% of all homes that went under contract that month, according to Redfin.

That share is up 12.2% from a year earlier, when a homebuying boom rocked the nation’s most popular markets and forced buyers to compete for a waning supply of for-sale homes. While Sun Belt cities are rebalancing post-pandemic, metros like New York and San Francisco are seeing strong sales as remote workers return to their in-person jobs and lay down roots as homeowners.

“House hunters today are taking their time and exploring their options, whereas six months ago, they had to act quickly and pull out every stop to compete because homes were selling almost immediately,” said Tzahi Arbeli, a Redfin real estate agent in Las Vegas. “Homebuyers now will agree to buy a house and be doing the inspection, and then back out because they found another home they love more.”

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