Realtors are facing an unprecedented number of buyers walking away from contracts, as individuals become increasingly selective in a challenging real estate market.
According to a report from Redfin released Tuesday, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract that month. This marks the highest percentage ever recorded for the month of June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed this surge in cancellations to buyers being more discerning in light of a costly market. She noted, “They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to rationalize not getting everything on their must-have list.”
In Miami, another Redfin agent, Rafael Corrales, reported experiencing challenging situations with last-minute cancellations over trivial matters. Approximately 2,500 home purchases were called off in Miami last month, representing about 17.6% of homes that went under contract in June. Corrales emphasized that the core issue is affordability.
The median home sale price hit a record $442,525 in June, and the average 30-year mortgage rate stood at 6.92%. In addition to high home prices and elevated mortgage rates, potential buyers are also burdened by rising costs associated with insurance, property taxes, HOA fees, and other expenses linked to homeownership, all intensified by inflation.
The overall lack of affordability in the national market has resulted in the most significant decline in home sales in eight months, as reported by Redfin. Home sales dropped 0.5% in June compared to the previous month, marking the largest decrease since October 2022. Year over year, home sales fell by 1.1% and were 21.5% lower than levels seen before the pandemic.