Realtors are encountering a significant increase in buyers withdrawing from home purchases, as individuals become more selective in a challenging real estate market.
In June, nearly 56,000 home-purchase agreements fell through, accounting for 15% of all homes that went under contract that month, as reported by Redfin. 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 surge in last-minute cancellations to buyers who are becoming increasingly particular in light of higher costs associated with purchasing a home.
“Buyers are backing out over minor issues because the monthly expenses related to buying a home today are just too high to justify not obtaining everything on their must-have list,” Zubiate stated.
Rafael Corrales, another agent with Redfin in Miami, noted that he has witnessed alarming situations, including last-minute dropouts due to trivial details. In Miami alone, about 2,500 home purchases were canceled in June, representing roughly 17.6% of homes that were under contract. Corrales emphasized that the primary concern is affordability.
The median home sale price reached an all-time high of $442,525 in June, with the average interest rate on a 30-year mortgage hitting 6.92%. Along with high home prices and elevated mortgage rates, potential homebuyers are also facing additional financial burdens such as insurance, property taxes, and homeowners association fees, all of which have been intensified by inflation.
The nationwide lack of affordability has led to the largest decline in home sales in eight months, according to Redfin. Month-over-month, home sales dropped by 0.5% in June, marking the most significant decrease since October 2022. Year-over-year, home sales fell by 1.1%, landing 21.5% below pre-pandemic levels.