Frustrated Buyers Are Dropping Out Of The Housing Market

Housing market
Various headwinds are leading to more buyers dropping out of the housing market.

The housing market has been a whirlwind in recent years. While it’s still a seller’s market in many areas, there’s a new trend emerging: frustrated buyers are throwing in the towel and leaving the search altogether.

A recent survey by Bright MLS found that over 73% of real estate agents have had clients pause or abandon their home search in the past six months. So what’s causing this exodus? Below we break down some of the top reasons why more buyers are dropping out of the housing market.

Common reasons why buyers are dropping out of the housing market

  • Rising Mortgage Rates: This is the number one culprit, according to the survey. Mortgage rates have climbed steadily in 2024, after hovering at historic lows for several years. This jump in rates significantly impacts what buyers can afford. The monthly payment on a house that was within reach just a few months ago might now be out of their budget. This is especially true for first-time home buyers, who often have tighter financial margins.
  • Bidding Wars and Cash Offers Discourage Competition: Many areas are still experiencing a seller’s market, with bidding wars driving prices well above asking. This can be incredibly disheartening for buyers who put in their best offer, only to lose out to a higher bid, sometimes from a cash buyer. Cash offers can be attractive to sellers because they close quickly and come with less risk of financing falling through. However, they can leave financed buyers feeling shut out.
  • Sky-High Home Prices: Inventory remains low in many areas, and with high demand, prices continue to soar. Buyers who were comfortable stretching their budget a few months ago may find themselves priced out entirely now.

What this means for the housing market

This trend of frustrated buyers could have a ripple effect on the housing market. With fewer buyers competing for homes, prices might stabilize or even dip slightly in some areas. However, it’s important to remember that overall inventory is still low. So while there may be less competition, there may also be fewer options for those who remain in the market.

Summary

The current housing market presents significant challenges for buyers. With rising rates, fierce competition, and high prices, it’s understandable that some are feeling frustrated. However, taking a break from the market doesn’t have to mean giving up on home ownership entirely. By strategically waiting and preparing themselves financially, these buyers may be better positioned to jump back in when the market shifts in their favor. Of course, the decision to buy a house should be based on your personal financial situation, not the market.

As always, it is best to hire a local and knowledgeable real estate agent when considering a home purchase. Are you thinking about buying a home in the South Florida area? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download the free Florida Home Search app from the Apple App Store or Google Play Store.

By natasha moore

REALTOR® with Live South Florida Realty, Inc.