Realtors are facing an unprecedented rise in buyers withdrawing from home purchase agreements, as increased selectivity emerges amidst a challenging real estate landscape.
According to a recent Redfin report, nearly 56,000 home-purchase agreements were abandoned in June, accounting for 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 cancellations to buyers who are more discerning due to the high costs associated with home buying. “They’re backing out due to minor issues because the monthly costs tied to purchasing a home today are just too high to justify not getting everything on their must-have list,” Zubiate noted.
Rafael Corrales, another Redfin agent based in Miami, has reported seeing extreme scenarios, with last-minute deal cancellations occurring over small details. In Miami alone, approximately 2,500 home purchases were canceled last month, representing around 17.6% of homes that went under contract in June. Corrales emphasized that affordability remains the primary hurdle for buyers.
The median home sale price reached a record $442,525 in June, with the average 30-year mortgage rate at 6.92%. Potential homebuyers are further burdened by insurance costs, property taxes, HOA fees, and other expenses related to homeownership, all of which have been intensified by inflation.
The nationwide affordability crisis has resulted in a significant decline in home sales, the most substantial decrease in eight months, according to Redfin. Home sales fell by 0.5% in June compared to the previous month, marking the largest drop since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.