Realtors are experiencing a significant increase in buyers backing out of home purchases, as consumers become more selective in an already challenging real estate environment.
According to a recent Redfin report, nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that were under contract during that month. This marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributes this trend to buyers being more discerning in light of higher market costs. She explained that many are retreating from deals over minor issues, as the current monthly costs of purchasing a home are considerable.
Rafael Corrales, another Redfin agent in Miami, reported witnessing several distressing situations where buyers canceled agreements at the last moment due to trivial details. In Miami, around 2,500 home purchases were canceled in June, accounting for about 17.6% of contracts that month. Corrales noted that the overarching concern remains affordability.
In June, the median home sale price reached a record $442,525, while the average 30-year mortgage rate stood at 6.92%. Potential buyers are further encumbered by additional costs associated with homeownership, including insurance, property taxes, and HOA fees, all of which have been affected by inflation.
The nationwide affordability crisis has led to a notable decline in home sales, which saw their steepest drop in eight months, according to Redfin. Home sales dipped by 0.5% in June compared to the previous month, marking the largest decrease since October 2023. Year-over-year, home sales fell by 1.1% and are currently 21.5% lower than pre-pandemic levels.