Realtors are experiencing an increasing number of buyers backing out of home purchases, reflecting a more discerning market in challenging real estate conditions.
A report from Redfin revealed that nearly 56,000 home purchase agreements were canceled in June, representing 15% of all contracts in that month, marking the highest rate recorded for any June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, pointed to this trend as buyers become more selective, particularly as they navigate an expensive housing market. She noted that many buyers are withdrawing from deals over minor concerns, as the high costs associated with homeownership make it difficult to compromise on their essential requirements.
Similarly, Rafael Corrales, a Redfin agent in Miami, highlighted challenging situations, including last-minute cancellations for minor issues. In June alone, about 2,500 home transactions were canceled in Miami, accounting for approximately 17.6% of contracts in that time frame. He attributed the primary concern to affordability.
The median home sale price in June hit a record high of $442,525, with the average rate for a 30-year mortgage at 6.92%. With the overall cost of homes and elevated mortgage rates, potential buyers are also facing increased expenses from insurance, property taxes, HOA fees, and other homeownership costs, which have been compounded by inflation.
This affordability issue has led to a notable decline in home sales nationwide, with the month of June seeing the largest decrease in eight months. Home sales fell by 0.5% month-over-month, the steepest drop since October 2023. Year-over-year figures also reflected a decline, with home sales down 1.1% and 21.5% lower compared to pre-pandemic levels.