Realtors are facing an increasing number of buyers backing out of home purchases as individuals become more selective in a challenging real estate market.
According to a Redfin report released Tuesday, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes under contract that month. This marks the highest percentage recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers being more discerning, particularly in light of escalating housing costs. “They are withdrawing due to minor issues because the monthly expenses tied to purchasing a home today are simply too significant to overlook if they are not getting everything on their must-have list,” Zubiate noted.
Rafael Corrales, a Redfin agent in Miami, reported experiencing “nightmare scenarios,” including last-minute cancellations driven by trivial details. Approximately 2,500 home purchases were called off in Miami last month, accounting for around 17.6% of homes that went under contract in June. Corrales emphasized that the primary issue is affordability.
In June, the median home sale price hit a record high of $442,525, with the average interest rate on a 30-year mortgage at 6.92%. In addition to the steep prices, prospective homeowners are also burdened by insurance, property taxes, homeowners association fees, and other costs linked to homeownership, all intensified by inflation.
This widespread lack of affordability has led to the most significant decline in home sales in eight months, as reported by Redfin. Monthly home sales saw a decrease of 0.5% in June, the largest drop since October 2023. Year-over-year, home sales fell by 1.1% and remain 21.5% below pre-pandemic levels.