Realtors are encountering an unprecedented number of buyers backing out of home purchase agreements as the real estate market remains challenging.
According to a Redfin report released on Tuesday, nearly 56,000 home-purchase agreements failed in June, representing 15% of all homes that were under contract that month. This marks the highest percentage ever recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the surge in cancellations to more discerning buyers who are faced with elevated housing costs. She noted that buyers are withdrawing due to minor issues because the high monthly expenses associated with purchasing a home today are compelling them to seek perfection on their must-have lists.
Rafael Corrales, a Redfin agent in Miami, described experiencing “nightmare scenarios” involving last-minute deal cancellations over trivial matters. In June alone, approximately 2,500 home purchases were canceled in Miami, accounting for about 17.6% of homes that were under contract. Corrales highlighted that the primary concern for buyers is affordability.
In June, the median home sale price reached an all-time high of $442,525, while the average rate on a 30-year mortgage stood at 6.92%. With the costly housing market and persistently high mortgage rates, potential buyers are also burdened by additional costs such as insurance, property taxes, and homeowners association fees, all of which have been impacted by inflation.
The nationwide lack of affordability in the housing market has led to the most significant drop in home sales in eight months, according to Redfin. Monthly home sales declined by 0.5% in June, marking the largest decrease since October 2023. Year-over-year, home sales dropped 1.1% and are currently 21.5% below pre-pandemic levels.