Homebuilders in metro Phoenix face an alarming surge in contract cancellations at a time when economists are pointing to another recession.
Through the middle of July, the cancellation rate was in the 30% range, up from 8-10% in 2020 and 2021, and up from 15% in 2018 and 2019, said Steven Hensley, advisory manager for Zonda housing market research firm.
"Phoenix builders have experienced a noticeable uptick in cancellations in recent months and are presently near levels experienced during the onset of the pandemic and nearly double pre-pandemic levels," Hensley said.
Cancellations in May and June mainly were a result of affordability and qualification issues, he said.
"The rapid rise in interest rates simply priced some homebuyers out of the market," he said.