Realtors are facing an unprecedented number of buyers backing out from home purchase agreements as the real estate market tightens, leading to increased selectivity among potential buyers.
A recent report from Redfin revealed that nearly 56,000 home purchase agreements fell through in June, accounting for 15% of all homes that went 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 in the San Francisco Bay Area, attributes this trend to a more discerning buyer who is struggling with the high costs associated with home buying. She noted that buyers are withdrawing from deals over minor issues due to the overwhelming financial commitments involved.
In Miami, Redfin agent Rafael Corrales reported experiencing “nightmare scenarios,” with last-minute cancellations often stemming from trivial details. Last month, approximately 2,500 home purchases were canceled in the area, representing about 17.6% of contracts. Corrales emphasized that the key concern remains affordability.
The median home sale price hit a record $442,525 in June, with the average rate for a 30-year mortgage at 6.92%. In addition to elevated home prices and mortgage rates, prospective buyers are increasingly burdened by rising costs related to insurance, property taxes, homeowner association (HOA) fees, and other expenses, which have been intensified by inflation.
This widespread lack of affordability has led to the most significant decline in home sales nationwide in eight months, according to Redfin. On a monthly basis, home sales fell by 0.5% in June, marking the largest decrease since October 2022. Year-over-year, sales declined 1.1%, landing 21.5% below pre-pandemic figures.