Record 60,000 home sales collapse in July due to election fears

A record 60,000 home buyers canceled their contracts in July, a new report shows, breaking all previous records.

This mass exodus, which accounted for 16% of all contracts signed that month, represents the highest July cancellation rate since Redfin began collecting this data in 2017.

The carnage was most brutal in regions where builders have gone into the market like mad in recent years, flooding the market with new homes. Tampa and Fort Lauderdale in Florida and San Antonio in Texas were the regions with the highest rate of contract collapses, according to Redfin.

Faced with growing inventories, sellers were forced to overcome their pride and lower their prices.

Zillow reported that over 26% of homes on the market saw price reductions in July, the largest share since 2018. For those still in the game, this oversupply means opportunities—not only in negotiating price, but also in getting lower commissions.

So what is the reason for this buyer’s remorse?

Although mortgage rates are falling, other factors are forcing potential homeowners to hit the brakes. The biggest concerns? Astronomically high housing prices and the looming uncertainty of the upcoming presidential election.

“When rates finally came down, buyers were excited and we saw more activity,” said Nicole Stewart, a real estate agent with Redfin in Boise, Idaho. But now, she says, many are holding off because “a lot of people are also concerned about the political climate.”

Stewart added that even those who can afford a home are “holding back because it’s unclear where the country will be in six months.”

Political concerns aren’t entirely new, but they’re making a noticeable mark on the market this year. While presidential elections don’t usually have a direct impact on home prices, they do tend to cause a drop in sales before the election.

In nine of the last eleven elections, home sales jumped in the year after the votes were counted.

“But whoever sits in the Oval Office probably won’t actually have much influence on the real estate market,” Stewart said.