Cyber Week Sale! 50% Off All Access

Homebuyers Are Backing Out of Purchases in This Area of the Country More Than Anywhere Else In The U.S. Houses in this area saw some of the highest surges in home prices during the pandemic. Now, those same locations are seeing homebuyers back out in record numbers.

By Madeline Garfinkle Edited by Jessica Thomas

Opinions expressed by Entrepreneur contributors are their own.

States in the Sun Belt, which comprises the traditionally sunny southern tier of the U.S., attracted an influx of homebuyers during the pandemic, which ultimately drove up prices and competition. However, the market is shifting, and those once sought-after cities are seeing a significant slowdown.

Data from Redfin found that 64,000 home purchase agreements fell through in August, or about 15.2% of total contracts signed that month. That's up from 12.1% of contracts that fell through in August 2021. According to the data, homebuyers in Sun Belt cities such as Phoenix, Jacksonville and Las Vegas were most likely to back out of agreements. Buyers were least likely to back out in coastal cities such as San Francisco and New York, which are still seeing competitive housing markets. It's unclear why homebuyers are backing out in droves, but a slowing market might be a factor, as buyers would rather wait to see what else is out there.

Related: Jerome Powell Says the Housing Market Correction 'Reset' Is Already Underway

"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," Tzahi Arbeli, a Redfin real estate agent in Las Vegas, told the company. "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."

Rising interest rates might also be a factor. The average 30-year-fixed mortgage rate hit 6.29% this month, the highest it's been since 2008. This might be driving homebuyers to rethink their decision as rates are significantly higher than when they first got approved for their loans.

Jacksonville, FL saw the most homebuyers back out in August at 26.1%. Following were Las Vegas at 23%, Atlanta at 22.6%, Orlando, FL at 21.9%, Fort Lauderdale, FL at 21.7%, Phoenix at 21.6%, Tampa, FL at 21.5%, Fort Worth, TX at 21.5%, San Antonio at 21.1% and Houston at 20.6%.

Related: Rent Prices Could Finally Be Cooling -- But Not in These Cities

Madeline Garfinkle

News Writer

Madeline Garfinkle is a News Writer at Entrepreneur.com. She is a graduate from Syracuse University, and received an MFA from Columbia University. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Growing a Business

Who Shapes a Brand — The Leader or the Audience? Here's What Really Determines Success.

Great brands thrive at the crossroads of leadership vision and audience engagement, balancing strategic direction with real-time feedback to stay authentic, relevant and trusted.

Growing a Business

How to Eliminate Unnecessary Tasks and Focus on What Really Matters

Hack away at the unessential and reclaim your time.

Growing a Business

How to Build a Winning Marketing Strategy That Sets Your Startup Apart

This guide outlines key strategies for startups to craft compelling narratives and effective marketing plans to overcome challenges and achieve long-term success.

Business Solutions

'Please Hold' is Officially Cancelled — How to Future-Proof Your Customer Service for Gen Z and Beyond

Customers are increasingly expecting better service. Younger generations are leading the way.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.