Realtors are experiencing an unprecedented number of buyer withdrawals as consumers become more discerning in a challenging real estate environment.
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 on the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increase in buyer hesitations to a more selective market where purchasers are dealing with elevated costs.
“They are withdrawing over minor concerns because the monthly expenses tied to home purchases today are just too significant to overlook not getting all the features on their wish list,” Zubiate noted.
Rafael Corrales, another Redfin agent based in Miami, reported “nightmare scenarios” such as last-minute cancellations for trivial reasons. In Miami alone, around 2,500 home purchases were aborted last month, accounting for approximately 17.6% of homes that went under contract. Corrales emphasized that the main challenge is affordability.
The median sale price of homes reached an all-time high of $442,525 in June, coinciding with an average rate of 6.92% for 30-year mortgages. In addition to the steep prices of homes in today’s market and persistently high mortgage rates, potential buyers are also facing increased costs from insurance, property taxes, HOA fees, and various other expenses related to homeownership that have been worsened by inflation.
The overall lack of affordability in the housing market has led to the most significant drop in home sales seen in eight months, as indicated by Redfin. Month-over-month home sales fell by 0.5% in June, marking the largest decrease since October 2022. On a year-over-year basis, home sales dropped 1.1% and were found to be 21.5% below levels seen prior to the pandemic.