Realtors are encountering an unprecedented number of buyers who are backing out of home purchases as the real estate market becomes increasingly challenging.
A recent report from Redfin highlighted that nearly 56,000 home-purchase agreements were canceled in June, making up 15% of all homes that entered contract during that month. This statistic marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributed the surge in cancellations to more discerning buyers who are navigating a costly market. “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,” Zubiate stated.
Rafael Corrales, a Redfin agent in Miami, reported troubling trends, including last-minute contract withdrawals over trivial matters. In Miami, about 2,500 home purchases were canceled last month, which accounts for approximately 17.6% of the homes that went under contract in June. He noted that affordability remains the paramount concern.
In June, the median home sale price hit a record high of $442,525, coupled with an average rate of 6.92% on 30-year mortgages. Additionally, prospective buyers are facing burdens from insurance, property taxes, HOA fees, and other expenses associated with homeownership, all of which have been aggravated by inflation.
Nationwide, the increasing unaffordability has led to a notable decline in home sales, with Redfin indicating that sales experienced the largest drop in eight months. Month-over-month, home sales decreased by 0.5% in June, the most significant decline since October 2022. Year-over-year, sales fell by 1.1% and were 21.5% lower than pre-pandemic figures.