Realtors are experiencing an unprecedented number of buyers backing out of home purchases, as potential homeowners become increasingly selective in a challenging real estate market.
According to a report from Redfin, 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 June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increase in canceled deals to buyers being more discerning, particularly in light of the high costs associated with purchasing a home.
“Buyers are pulling out for minor issues because the monthly expenses tied to homeownership are too significant to justify settling for less than their ideal criteria,” Zubiate explained.
Similarly, Rafael Corrales, a Redfin agent in Miami, has witnessed troubling trends, including last-minute cancellations over trivial matters. In June, approximately 2,500 home purchases were canceled in Miami, accounting for about 17.6% of homes that were under contract. Corrales noted that the primary concern for buyers is the issue of affordability.
The median home sale price surged to a record high of $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. In addition to the elevated home prices and persistent mortgage rates, potential buyers are facing challenges from rising insurance costs, property taxes, homeowners association fees, and other ownership expenses, all intensified by inflation.
This national affordability crisis has led to the most significant decrease in home sales in eight months, according to Redfin. Home sales fell by 0.5% in June compared to the previous month, marking the steepest drop since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic figures.