Realtors are experiencing a notable increase in buyers retracting from home purchases as potential homeowners grow more selective in a challenging real estate climate.
According to a report from Redfin, nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that went under contract during the month. This marks the highest percentage recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributes the increase in indecisiveness to buyers facing the pressures of a costlier market.
“They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to justify not getting everything on their must-have list,” Zubiate remarked.
In Miami, Redfin agent Rafael Corrales reported experiencing “nightmare scenarios” where buyers cancel agreements at the last minute over trivial details. Last month, approximately 2,500 home purchases were called off in Miami, accounting for around 17.6% of homes that went under contract in June. Corrales noted that the primary concern for many buyers is affordability.
The median home sale price hit a historic high of $442,525 in June, while the average rate for a 30-year fixed mortgage stood at 6.92%. Potential buyers are facing not only high property prices and elevated mortgage rates but also increased costs related to insurance, property taxes, homeowners association fees, and other expenses, all intensified by inflation.
This widespread lack of affordability has led to the most significant decline in home sales nationwide in eight months, as reported by Redfin. Home sales decreased by 0.5% in June compared to the previous month—the largest reduction since October 2023. Year-over-year, home sales fell by 1.1%, and they remain 21.5% below pre-pandemic levels.