Realtors are experiencing an unprecedented number of buyers withdrawing from home purchases, as potential homeowners become increasingly selective amid challenging market conditions.
A report from Redfin, published on Tuesday, revealed that nearly 56,000 home-purchase agreements were canceled in June, amounting to 15% of all homes that went under contract that month. This marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributed the surge in cancellations to buyers who are facing a more expensive housing market. She noted that buyers are backing out over minor issues due to the high monthly costs involved in purchasing a home today.
Rafael Corrales, another Redfin agent in Miami, reported witnessing significant last-minute cancellations over trivial details. In Miami alone, around 2,500 home purchases were canceled in June, representing about 17.6% of homes under contract. He highlighted that the primary concern for many buyers is affordability.
The median home sale price hit a record $442,525 in June, with the average rate for a 30-year mortgage reaching 6.92%. Prospective homeowners are also burdened by rising costs associated with insurance, property taxes, HOA fees, and other expenses that have been intensified by inflation.
This widespread lack of affordability in the housing market has contributed to a notable decline in home sales, which experienced their most significant drop in eight months, according to Redfin. Home sales fell by 0.5% in June compared to the previous month, the largest decrease since October 2022. On a year-over-year basis, home sales declined by 1.1% and were 21.5% lower than pre-pandemic levels.