Realtors are facing an unprecedented number of buyers backing out of home purchase agreements, as consumer expectations rise amid a challenging real estate environment.
According to a report from Redfin, nearly 56,000 home-purchase agreements collapsed in June, representing 15% of all homes that entered into contracts that month. This marks the highest percentage of failed agreements recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increase in cancellations to a more discerning buyer pool responding to the high costs of homeownership.
“They’re walking away due to minor issues because the ongoing costs involved in purchasing a home today are simply too substantial to overlook the essentials on their wish list,” Zubiate noted.
In Miami, another Redfin agent, Rafael Corrales, described witnessing “nightmare scenarios,” including last-minute dropouts over trivial matters. Approximately 2,500 home purchases were called off last month, accounting for about 17.6% of contracts that month. Corrales highlighted the primary concern as being affordability.
The median sale price for homes reached an all-time high of $442,525 in June, coinciding with an average 30-year mortgage rate of 6.92%. Prospective homeowners are also facing heightened expenses due to insurance, property taxes, and homeowners association fees, with rising inflation compounding these financial pressures.
The significant affordability challenges affecting the national market have led to the biggest drop in home sales in eight months, as reported by Redfin. On a month-to-month basis, home sales decreased by 0.5% in June, marking the largest decline since October 2023. Annually, home sales fell by 1.1%, which is 21.5% lower than pre-pandemic figures.