Realtors are facing an increasing number of buyers who are backing out of home purchases, as potential homeowners become more discerning amid a challenging real estate environment.
According to a recent 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 for June recorded by the platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes this trend to buyers being more selective in a costly market. She noted that due to the elevated monthly expenses linked with buying a home today, many are withdrawing over minor issues instead of compromising on their priorities.
Rafael Corrales, another Redfin agent based in Miami, described instances where minor details have led to last-minute cancellations. In June alone, approximately 2,500 home purchases were canceled in Miami, amounting to about 17.6% of homes that were under contract. He highlighted that the primary challenge for buyers is affordability.
The median home sale price surged to a record $442,525 in June, while the average interest rate on a 30-year mortgage stood at 6.92%. Along with high home prices and elevated mortgage rates, potential buyers are also contending with increased costs such as insurance, property taxes, HOA fees, and other homeownership expenses intensified by inflation.
This widespread issue of affordability across the nation has led to a significant decline in home sales, with Redfin reporting the most substantial drop in eight months. Home sales decreased by 0.5% from the previous month, making it the largest decline since October 2023. Comparatively, year-over-year sales fell by 1.1% and remained 21.5% below pre-pandemic levels.