Realtors are facing an unprecedented number of buyers withdrawing from home purchases as prospective homeowners become more selective amid challenging market conditions.
A report from Redfin revealed that in June, nearly 56,000 home-purchase agreements were abandoned, representing 15% of all contracts that month. This marks the highest rate ever recorded for June by the real estate company.
Julie Zubiate, a Redfin Premier agent from the San Francisco Bay Area, attributes the increase in indecision to a more discerning buyer demographic faced with a costly housing market. She noted that buyers are backing out for minor reasons, as the expenses tied to purchasing a home today make it crucial for them to secure all their desired features.
In Miami, Redfin agent Rafael Corrales described observing “nightmare scenarios,” where buyers canceled deals due to trivial details. In June alone, approximately 2,500 home purchases were canceled in Miami, equating to about 17.6% of homes that went under contract. Corrales highlighted that the primary concern remains affordability.
The median home sale price reached an all-time high of $442,525 in June, with the average rate for a 30-year mortgage hitting 6.92%. Potential buyers are additionally facing substantial costs related to insurance, property taxes, and homeowners association fees, all of which have been intensified by inflation.
Nationwide, the lack of affordability has driven home sales to experience their steepest decline in eight months, as reported by Redfin. Sales dipped by 0.5% from the previous month, marking the largest decrease since October 2023. Compared to the same month last year, home sales fell by 1.1%, and they remain 21.5% below levels recorded before the pandemic.