Realtors are facing an unprecedented increase in buyers backing out of home purchases as individuals 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 were under contract that month. This marks the highest percentage for any June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed this rise in cancellations to buyers being more selective due to the expensive nature of the current market. She noted that buyers are withdrawing for relatively minor issues, as the monthly costs associated with purchasing a home are high enough that they feel the need to check off all items on their must-have list.
Rafael Corrales, a Redfin agent based in Miami, reported experiencing difficult situations, including last-minute cancellations over trivial details. Last month, approximately 2,500 home purchases were called off in Miami, accounting for around 17.6% of homes that went under contract. He pointed out that the primary challenge is affordability.
In June, the median home sale price reached a record $442,525, while the average rate for a 30-year mortgage stood at 6.92%. Additionally, prospective buyers are facing mounting costs such as insurance, property taxes, homeowners association fees, and other expenses associated with homeownership, all of which have been intensified by inflation.
The widespread lack of affordability has led to a significant downturn in home sales across the country, which experienced its largest decline in eight months. Redfin reported a month-over-month drop of 0.5% in June, the biggest decrease since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.