Realtors are experiencing an unprecedented number of buyers backing out of home purchases as the real estate market becomes increasingly challenging.
According to a report from Redfin, nearly 56,000 purchase agreements failed in June, accounting for 15% of all homes that went under contract that month. This represents the highest percentage for any June recorded by the platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes the increase in buyers reneging on deals to a more discerning clientele facing higher market prices. She noted that many are withdrawing due to minor issues, as the high monthly costs of homeownership have made it difficult to settle for anything less than their ideal home.
Rafael Corrales, a Redfin agent in Miami, reported witnessing troubling last-minute cancellations over trivial details. In June, approximately 2,500 home purchases in Miami were canceled, equating to about 17.6% of homes that went under contract. Corrales indicated that the primary concern remains affordability.
The median sale price for homes reached an all-time high of $442,525 in June, with the average rate for a 30-year mortgage at 6.92%. In addition to elevated home prices and high mortgage rates, potential buyers are also burdened by insurance, property taxes, HOA fees, and other homeownership costs that have surged due to inflation.
This lack of affordability has contributed to the most significant decline in home sales observed in eight months. Redfin reported that home sales fell by 0.5% in June — the largest monthly drop since October 2023. Yearly comparisons show a decrease of 1.1% in home sales, which are now 21.5% lower than pre-pandemic levels.