Realtors are encountering a surge in buyers backing out of home purchases, reflecting a heightened level of selectivity amid a challenging real estate landscape.
According to a report from Redfin, nearly 56,000 home purchase agreements were canceled in June, representing 15% of all homes that went under contract during that month. This marks the highest percentage recorded for any June by the real estate site.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in buyer hesitancy to a more discerning clientele navigating an expensive market. She noted, “They are withdrawing due to minor issues because the monthly costs associated with purchasing a home today are simply too high to justify settling for less than their essential criteria.”
Rafael Corrales, a Redfin agent in Miami, reported witnessing troubling scenarios, including last-minute cancellations triggered by small concerns. Last month, approximately 2,500 home purchases were called off in Miami, which accounted for about 17.6% of contracts. Corrales emphasized that the primary concern is affordability, as potential buyers face mounting financial pressures.
In June, the median home sale price hit a record high of $442,525, with the average rate for a 30-year mortgage standing at 6.92%. In addition to skyrocketing home prices and elevated mortgage rates, buyers are also grappling with increased costs related to insurance, property taxes, and homeowners association fees, all aggravated by inflation.
This widespread lack of affordability has led to the largest decline in home sales in eight months, as reported by Redfin. Home sales decreased by 0.5% month-over-month in June, marking the steepest decline since October 2022. Year-over-year, home sales fell by 1.1% and were 21.5% below pre-pandemic figures.