Realtors are facing an increasing number of buyers who are backing out of home purchases, as consumers become more selective in a challenging real estate market.
According to a report from Redfin, nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that went under contract that month. This marks the highest percentage recorded for June in the history of the real estate site.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this rise in canceled agreements to buyers feeling overwhelmed by the high costs associated with purchasing a home. She noted that many are walking away due to relatively minor issues, as the ongoing expenses make it difficult to settle for anything less than what they really want.
Rafael Corrales, a fellow Redfin agent based in Miami, reported witnessing numerous last-minute cancellations over minor details. In Miami, approximately 2,500 home purchases were canceled last month, accounting for about 17.6% of homes that were under contract in June. Corrales highlighted affordability as the primary concern for buyers.
The median home sale price hit a record high of $442,525 in June, while the average rate for a 30-year mortgage rose to 6.92%. With the soaring prices of homes and consistently high mortgage rates, potential homebuyers are also facing additional burdens such as insurance, property taxes, HOA fees, and other homeownership-related expenses, which have been worsened by inflation.
The affordability crisis in the housing market has led to a significant drop in home sales nationwide, marking the largest decrease in eight months, as reported by Redfin. On a month-to-month basis, home sales fell by 0.5% in June, the steepest decline since October 2022. Year-over-year, sales were down by 1.1% and remained 21.5% below pre-pandemic levels.