Realtors are experiencing an increase in buyers retracting their offers as the real estate market becomes more selective and challenging. A report published by Redfin reveals that nearly 56,000 home-purchase agreements were abandoned in June, accounting for 15% of all contracts signed that month, marking the highest percentage for June recorded by the platform.
Julie Zubiate, a Redfin Premier agent based in the San Francisco Bay Area, attributes this trend to buyers being more discerning in the face of rising costs associated with purchasing a home. She noted that buyers are backing out over minor issues because the monthly expenses of homeownership have become too significant to overlook without meeting all their requirements.
In Miami, Redfin agent Rafael Corrales reported experiencing severe cases of last-minute cancellations over trivial matters. He indicated that approximately 2,500 home purchases were canceled in the Miami area last month, translating to about 17.6% of homes that went under contract in June. Corrales emphasized that affordability remains the primary concern for potential buyers.
The median home sale price reached a record high of $442,525 in June, with 30-year mortgage rates averaging 6.92%. Alongside the elevated home prices and ongoing high mortgage rates, prospective homeowners are also grappling with additional expenses such as insurance, property taxes, homeowner association fees, and overall costs that have been intensified by inflation.
As a result of these affordability challenges, home sales across the country have seen their most significant decline in eight months, according to Redfin. Monthly home sales decreased by 0.5% in June, marking the most considerable reduction since October 2023. Year-over-year sales also experienced a drop of 1.1% and were 21.5% below pre-pandemic levels.