Realtors are experiencing an increasing number of buyers backing out of home purchases, as potential homeowners become more selective in a challenging real estate market.
According to a Redfin report released on Tuesday, approximately 56,000 home-purchase agreements fell through in June, accounting for 15% of all homes that were 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 the rise in cancellations to buyers being more cautious and facing the realities of an expensive market. “They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to rationalize not getting everything on their must-have list,” Zubiate stated.
In Miami, fellow Redfin agent Rafael Corrales has noted troubling trends, with significant last-minute cancellations over minor details. Approximately 2,500 home purchases were canceled in Miami last month, representing around 17.6% of homes under contract in June. Corrales indicated that the main obstacle is affordability.
The median home sale price reached a record high of $442,525 in June, with the average rate on a 30-year mortgage at 6.92%. Additionally, prospective homeowners are navigating high costs for insurance, property taxes, homeowners association fees, and other expenses tied to homeownership, all intensified by inflation.
This nationwide lack of affordability has led to a marked decline in home sales, the largest drop in eight months, according to Redfin. Monthly home sales fell by 0.5% in June, the most significant decrease since October 2022. Year-over-year figures show a 1.1% drop in sales, which are now 21.5% below pre-pandemic levels.