Realtors are experiencing an unprecedented number of buyers backing out of home purchases, as increased selectivity sets in amid challenging real estate conditions.
According to a report released by Redfin, nearly 56,000 agreements for home purchases fell through in June, accounting for 15% of all homes that went under contract that month. This marks the highest percentage recorded for any June in the history of the real estate platform.
Julie Zubiate, a Redfin Premier agent operating in the San Francisco Bay Area, attributed the trend to buyers being more discerning, as they navigate a market where expenses have escalated significantly. “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 commented.
In Miami, Redfin agent Rafael Corrales noted troubling cancellation scenarios, including last-minute pullouts over seemingly trivial details. In June alone, approximately 2,500 home sales were canceled in Miami, accounting for about 17.6% of homes that went under contract that month. Corrales emphasized that the primary concern remains affordability.
The median sale price for homes reached a historic high of $442,525 in June, with the average mortgage rate for a 30-year loan at 6.92%. Alongside these elevated home prices and mortgage rates, potential buyers are also confronting rising costs linked to insurance, property taxes, homeowners association (HOA) fees, and other homeownership-related expenses, all worsened by inflation.
The nationwide affordability crisis has led to the most significant decline in home sales in eight months, as reported by Redfin. On a month-to-month basis, home sales fell by 0.5% in June, marking the largest decrease since October 2023. Year over year, there was a 1.1% decline in home sales, bringing numbers down to 21.5% below pre-pandemic levels.