Realtors are experiencing a significant increase in buyers backing out of home purchases, as potential homeowners are becoming increasingly selective in a challenging real estate market.
A report from Redfin revealed that nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract that month. This marks the highest percentage recorded for any June by the real estate company.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers being more discerning, particularly as they face rising costs in the housing market. She noted that many buyers are withdrawing due to minor concerns, feeling that the monthly expenses tied to homeownership are too significant to compromise on their must-have criteria.
In Miami, Redfin agent Rafael Corrales highlighted disturbing situations unfolding in the market, including last-minute cancellations based on trivial details. Last month, around 2,500 home purchases were called off in Miami, accounting for approximately 17.6% of homes that went under contract in June. Corrales emphasized that the primary issue is affordability.
The median home sale price reached an all-time high of $442,525 in June, with the average interest rate for a 30-year mortgage at 6.92%. Alongside elevated home prices and persistent mortgage rates, potential buyers are also contending with inflated costs related to insurance, property taxes, homeowner association fees, and other ownership expenses, all amplified by inflation.
This widespread lack of affordability has led to the largest decline in home sales nationwide in the past eight months, as per Redfin’s analysis. Month over month, home sales fell by 0.5% in June—the most significant drop since October 2023. Compared to last year, home sales decreased by 1.1% and were 21.5% lower than levels seen before the pandemic.