Realtors are facing an unprecedented number of buyers backing out of home purchases as individuals become more selective in a challenging real estate market.
According to a report from Redfin, nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that entered contracts that month. This marks the highest percentage recorded for June by the real estate site.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed this trend to buyers who are increasingly picky amid high market costs. “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,” she explained.
In Miami, Redfin agent Rafael Corrales reported experiencing “nightmare scenarios,” including last-minute cancellations driven by minor details. Last month, about 2,500 home purchases were canceled in Miami, amounting to approximately 17.6% of homes that entered contracts in June. Corrales noted that the primary concern remains affordability.
The median home sale price reached a record $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. Buyers are also grappling with additional expenses like insurance, property taxes, HOA fees, and other costs of homeownership, further heightened by inflation.
Nationwide affordability issues have led to the most significant drop in home sales in eight months, according to Redfin. Month-over-month, home sales decreased by 0.5% in June, marking the largest decline since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% below pre-pandemic levels.