Realtors are experiencing an unprecedented number of buyers backing out of home purchases as buyers grow more selective in a challenging real estate market.
According to a recent Redfin report, 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 of cancellations recorded by Redfin for any June in its history.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this increase in canceled agreements to buyers being more particular. She notes that many buyers are pulling out due to minor issues, as the financial implications of purchasing a home today make them less willing to compromise on their requirements.
Rafael Corrales, a Redfin agent in Miami, has observed challenging situations, including last-minute cancellations over trivial details. He reported that approximately 2,500 home purchases were canceled in Miami last month, representing about 17.6% of homes under contract in June. Corrales highlighted that the primary concern for buyers is affordability.
In June, the median home sale price reached a record $442,525, while the average rate for a 30-year mortgage was at 6.92%. Alongside high home prices and mortgage rates, potential buyers are also facing additional costs such as insurance, property taxes, and homeowners association fees, which have been further impacted by inflation.
The nationwide lack of affordability has led to a significant decline in home sales, the largest drop in eight months, as reported by Redfin. Monthly home sales fell by 0.5% in June, marking the steepest decline since October 2023. Year-over-year, home sales saw a dip of 1.1% and remain 21.5% below pre-pandemic levels.