Realtors are facing an increase in buyers backing out of home purchases, as potential homeowners become more selective in a challenging real estate market.
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—marking the highest percentage for June recorded by the real estate website.
Julie Zubiate, a real estate agent with Redfin in the San Francisco Bay Area, attributed the rise in buyer hesitancy to the high costs of homeownership. She noted that buyers are withdrawing due to minor issues because the financial implications of purchasing a home today are daunting, making them less willing to compromise on their must-have lists.
In Miami, Redfin agent Rafael Corrales described witnessing distressing situations, with around 2,500 home purchases canceled last month—approximately 17.6% of homes under contract in June. He emphasized that affordability remains the primary concern for buyers.
The median home sale price hit a record high of $442,525 in June, accompanied by an average mortgage rate of 6.92% for 30-year loans. In addition to these home prices and high mortgage rates, prospective buyers are also overwhelmed by various associated costs such as insurance, property taxes, and homeowners association fees, all of which have been compounded by inflation.
This lack of affordability has led to the steepest decline in home sales seen in eight months, as reported by Redfin. Monthly sales decreased by 0.5% in June, the largest drop since October 2022. Year-over-year, home sales fell by 1.1%, placing them about 21.5% below levels recorded prior to the pandemic.