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The Real Deal Miami

Cancellation increase puzzles real estate pros

July 27, 2011 03:10PM

Real estate agents are perplexed by a sudden rise in contract cancellations of existing homes in June, CNBC reported. June saw a 16 percent rise in contract cancellations. Normally, existing home cancellations are under 10 percent, and were 4 percent in May. Lawrence Yun, chief economist for the National Association of Realtors, attributed the spike to the slow economy and added that that the slow pace of job creation could have driven some buyers to pull out of their contracts. Paul Dales, Senior U.S. economist at Capital Economics, added that tighter credit criteria meant that some cancellations might have occurred because financing fell through. He also noted that mortgage applications, which have been lackluster recently and continue to decrease, do not indicate any sales rebound. [CNBC]