Realtors are experiencing a surge in buyers backing out of home purchases as the real estate market becomes increasingly challenging and selective.
A recent report from Redfin indicates that nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that were under contract that month. This marks the highest percentage of canceled agreements recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to more discerning buyers who are navigating a costly market. She noted, “They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to rationalize not getting everything on their must-have list.”
Rafael Corrales, a Redfin agent in Miami, reported witnessing severe scenarios arising from last-minute cancellations over trivial concerns. In Miami alone, approximately 2,500 home purchases were canceled last month, accounting for about 17.6% of homes that went under contract in June. Corrales highlighted that the primary concern for buyers is affordability.
The median home sale price reached an all-time high of $442,525 in June, with the average rate for a 30-year mortgage standing at 6.92%. Alongside the elevated prices of homes, prospective buyers are also faced with burdens such as insurance, property taxes, HOA fees, and other ownership costs that have been worsened by inflation.
This widespread lack of affordability has led to significant declines in home sales across the nation, with Redfin reporting that sales dropped 0.5% from the previous month in June, marking the largest fall since October 2023. Additionally, year-over-year home sales decreased by 1.1% and are 21.5% lower than pre-pandemic levels.