Real estate agents are experiencing an unprecedented number of buyers backing out of home purchases, as heightened selectivity emerges in a challenging housing market.
According to a Redfin report released on Tuesday, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract that month. This marks the highest percentage for any June recorded by the real estate company.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed this trend to buyers being more discerning in light of rising costs. She noted that many are withdrawing from deals over minor issues because the current monthly expenses associated with homeownership are too significant to justify settling for less than their ideal criteria.
In Miami, Redfin agent Rafael Corrales observed “nightmare scenarios” unfold, including last-minute cancellations over insignificant details. In June alone, approximately 2,500 home purchases were called off in Miami, equating to about 17.6% of homes that went under contract that month. Corrales highlighted that the core issue remains affordability.
As of June, the median home sale price hit a record high of $442,525, while the average rate for a 30-year mortgage climbed to 6.92%. Compounded by steep home prices and ongoing high mortgage rates, potential buyers are also facing additional financial burdens from insurance, property taxes, HOA fees, and other homeownership costs, all of which have been intensified by inflation.
This prevailing lack of affordability has led to the most significant decline in home sales across the nation in eight months, Redfin reports. Monthly home sales dipped by 0.5% in June, the largest drop since October 2023. Comparatively, year-over-year sales fell by 1.1%, which is 21.5% lower than levels seen before the pandemic.