Realtors are facing an unprecedented number of buyers backing out of home purchase agreements, as consumers grow increasingly selective in a challenging real estate landscape.
A recent report from Redfin reveals that nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes going under contract during that month. This marks the highest percentage recorded for any June by the real estate firm.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers becoming more particular in a market with high 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,” Zubiate explained.
Rafael Corrales, a Redfin agent in Miami, echoed her sentiments, reporting distressing last-minute cancellations over small details. Approximately 2,500 home purchase deals fell through in Miami last month, accounting for roughly 17.6% of homes that went under contract in June. Corrales pointed out that the primary concern remains affordability.
The median sale price of homes hit a record high of $442,525 in June, coinciding with an average mortgage rate of 6.92% for 30-year loans. Additionally, potential buyers are overwhelmed by a multitude of expenses linked to homeownership, including insurance, property taxes, HOA fees, and other costs, which have all been impacted by inflation.
This affordability crisis is contributing to a notable decline in home sales nationwide, as reported by Redfin. On a monthly basis, home sales dipped by 0.5% in June, marking the most significant drop since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than pre-pandemic levels.