Realtors are experiencing a significant increase in buyers backing out of home purchases as individuals become more selective in a challenging real estate market.
A recent report from Redfin highlighted that nearly 56,000 home purchase agreements were canceled in June, representing 15% of all homes that entered contracts that month. This marks the highest percentage for any June recorded by the company.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, noted that buyers are pulling out due to minor issues, as the overall costs of purchasing a home have become prohibitively high. “Buyers are reconsidering their decisions because the monthly costs are too substantial to overlook without having every item on their essential list,” Zubiate explained.
Rafael Corrales, another Redfin agent based in Miami, described alarming trends where even small details have led to last-minute cancellations. In Miami alone, approximately 2,500 home purchases were scrapped last month, which translates to about 17.6% of homes that went under contract in June. He pointed out that affordability remains the primary concern for buyers.
In June, the median home sale price reached a new peak of $442,525, while the average rate for a 30-year mortgage surged to 6.92%. This combination of high home prices and elevated mortgage rates is further complicated by rising insurance, property taxes, homeowner association fees, and other ownership costs that have been intensified by inflation.
The nationwide affordability crisis has resulted in the most significant drop in home sales in eight months, as detailed by Redfin. Month-over-month, home sales in June decreased by 0.5%, marking the largest decline since October 2023. Year-over-year, there was a 1.1% drop in home sales, with figures 21.5% below levels seen before the pandemic.