Realtors are facing an unprecedented number of buyers withdrawing from home purchase agreements, reflecting an increasingly selective clientele in a challenging real estate market.
According to a recent Redfin report, nearly 56,000 home purchase agreements were abandoned in June, which accounts for 15% of all homes that went under contract that month. This marks the highest percentage of cancellations recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers backing out due to relatively minor issues as they navigate a market with high monthly costs. “The expenses associated with buying a home today are just too high to settle for less than they want,” Zubiate stated.
In Miami, fellow Redfin agent Rafael Corrales reported experiencing “nightmare scenarios” where buyers canceled deals over trivial details. Last month alone, around 2,500 home purchases in Miami were scrapped, representing approximately 17.6% of homes under contract in June. Corrales emphasized that the primary concern for buyers is affordability.
The median home sale price hit a record high of $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. Alongside the elevated costs of homes and persistent mortgage rates, prospective buyers are also facing additional burdens from insurance, property taxes, and HOA fees – all of which have been intensified by inflation.
This widespread lack of affordability has led to a significant decline in home sales nationwide, the most notable drop in eight months, as reported by Redfin. Month-over-month, home sales decreased by 0.5% in June, representing the largest fall since October 2023. Year-over-year, home sales fell by 1.1% and were down 21.5% compared to pre-pandemic levels.