Realtors are currently facing a surge in buyers backing out of home purchase agreements, as potential homeowners become increasingly selective in a challenging real estate market.
According to a recent report by Redfin, nearly 56,000 home purchase agreements were canceled in June, accounting for 15% of all homes that entered into contracts during that month. This marks the highest percentage of cancellations recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to a more discerning buyer demographic struggling with high costs. She noted that buyers are opting out over minor issues, as the monthly expenses associated with purchasing a home have escalated, making it essential for them to secure every item on their wish list.
Rafael Corrales, a Redfin agent in Miami, echoed these sentiments, highlighting distressing scenarios, including last-minute deal cancellations for trivial matters. In June alone, approximately 2,500 home purchases were called off in Miami, representing 17.6% of homes that went under contract. Corrales emphasized that the primary concern is affordability.
The median home sale price hit a record high of $442,525 in June, with the average 30-year mortgage rate at 6.92%. Alongside the elevated prices and mortgage rates, potential buyers are facing additional financial burdens, including insurance, property taxes, HOA fees, and other homeownership costs, all of which have been intensified by inflation.
This affordability crisis is contributing to a notable downturn in home sales across the nation, with Redfin reporting a 0.5% decline in sales in June—the largest drop observed since October 2023. Year-over-year, home sales decreased by 1.1%, falling 21.5% below pre-pandemic levels.