Realtors are facing an unprecedented number of buyers backing out of home purchases as individuals grow more selective in today’s challenging real estate market.
According to a report from Redfin, nearly 56,000 home-purchase agreements fell apart in June, equating to 15% of all homes that went under contract during that month. This marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier agent based in the San Francisco Bay Area, attributes the increase in buyers having second thoughts to the high costs associated with purchasing a home. She noted that buyers are often canceling deals over seemingly minor issues because the monthly costs are too significant to overlook without getting everything on their wish lists.
Rafael Corrales, a Redfin agent in Miami, also reported experiencing “nightmare scenarios,” with many last-minute cancellations occurring over trivial matters. In Miami alone, approximately 2,500 home purchases were canceled in June, representing about 17.6% of contracts within the same time frame. Corrales emphasized that the primary issue remains 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%. Adding to the burden, prospective buyers are also facing increased expenses related to insurance, property taxes, HOA fees, and other costs of homeownership, all made worse by inflation.
This widespread lack of affordability has led to a notable decline in home sales across the country, with Redfin reporting the largest decrease in eight months. Home sales dipped by 0.5% in June, marking the most significant drop since October 2023. Year-over-year, sales fell by 1.1% and were 21.5% lower than the levels before the pandemic.