Realtors are facing an unprecedented number of buyers backing out of home purchase agreements as consumers grow increasingly selective in a challenging real estate market.
According to a recent report by Redfin, nearly 56,000 home purchase agreements were canceled in June, making up 15% of all homes that went under contract that month. This marks the highest percentage of cancellations for any June recorded by the real estate site.
Julie Zubiate, a Redfin Premier agent based in the San Francisco Bay Area, attributes this trend to buyers being more discerning amid escalating costs associated with homeownership. She noted that many buyers are withdrawing over minor issues due to the high monthly costs involved in purchasing a home today.
Rafael Corrales, a Redfin agent in Miami, reported experiencing “nightmare scenarios” with last-minute cancellations over trivial details. In Miami alone, approximately 2,500 home purchases were scrapped last month, constituting about 17.6% of homes that went under contract in June. He pointed out that affordability remains the primary concern for buyers.
The median sale price for homes hit a record high of $442,525 in June, while the average 30-year mortgage rate stood at 6.92%. This, combined with persistent high prices and mortgage rates, along with rising insurance costs, property taxes, and homeowners association fees driven by inflation, has further complicated the situation for potential home buyers.
The nationwide disparity in housing affordability has contributed to a significant decline in home sales, marking the largest drop in eight months, according to Redfin. Home sales decreased by 0.5% month-over-month in June, reflecting the biggest decline since October 2023. Year-over-year sales also saw a dip of 1.1%, remaining 21.5% below pre-pandemic figures.