Realtors are experiencing a significant increase in buyers walking away from home purchases as potential homeowners become more selective in a challenging real estate environment.
According to a report from Redfin released on Tuesday, nearly 56,000 home-purchase agreements collapsed in June, equivalent to 15% of all homes that went under contract that month. This figure represents the highest percentage recorded for any June by the real estate website.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes the surge in buyer withdrawals to individuals who are now more discerning and facing a costly housing market. She noted that buyers are canceling contracts over minor issues because the expenses related to home buying have become too substantial to overlook.
Rafael Corrales, a Redfin agent in Miami, reported witnessing extreme cases, including last-minute cancellations due to trivial matters. Approximately 2,500 home purchases were canceled in Miami last month, making up about 17.6% of homes that went under contract in June. Corrales emphasized that the core issue remains affordability.
The median home sale price hit a record high of $442,525 in June, with the average 30-year mortgage rate at 6.92%. Alongside the elevated home prices and ongoing high mortgage rates, prospective buyers are also burdened by additional costs such as insurance, property taxes, and homeowners association fees, all of which have been intensified by inflation.
Nationwide affordability challenges have resulted in a significant decline in home sales, marking the most considerable drop in eight months, as noted by Redfin. Monthly home sales decreased by 0.5% in June, the largest decline since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than levels observed before the pandemic.