Realtors are currently experiencing a significant increase in buyers withdrawing from home purchase agreements, as indicated by recent data from Redfin. In June, nearly 56,000 agreements were canceled, accounting for 15% of all homes that went under contract during that month, marking the highest percentage for any June on record.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed this trend to more discerning buyers who are struggling with the high costs of homeownership. She noted that many buyers are backing out over minor issues, as the overall monthly expenses of purchasing a home have become challenging to justify without meeting all their must-have requirements.
In Miami, Redfin agent Rafael Corrales reported witnessing troubling scenarios, including last-minute cancellations due to minor details. Approximately 2,500 home purchases were canceled in Miami in June, representing 17.6% of the homes under contract. Corrales highlighted that affordability remains the primary concern for buyers.
The median sale price of homes reached a record $442,525 in June, while the average rate for a 30-year mortgage was 6.92%. In addition to high home prices and mortgage rates, potential buyers are facing increased costs from insurance, property taxes, homeowners’ association fees, and other expenses that have been pushed up by inflation.
This decline in affordability has led to the most significant drop in home sales in eight months, according to Redfin. Monthly home sales decreased by 0.5% in June, marking the largest decline since October 2022. Year-over-year, home sales fell by 1.1% and remain 21.5% below levels seen before the pandemic.