Realtors are witnessing an increasing number of buyers walking away from home-purchase agreements, with a recent report from Redfin indicating that nearly 56,000 agreements fell through in June. This accounts for 15% of all homes under contract for that month, marking the highest percentage recorded for June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed this uptick in cancellations to buyers becoming more selective in a challenging market. She noted that many are choosing to back out over minor concerns, as the overall costs of homeownership have become too daunting.
In Miami, Redfin agent Rafael Corrales reported similar trends, highlighting instances of last-minute cancellations due to trivial details. In June alone, approximately 2,500 home purchases were canceled in Miami, representing about 17.6% of contracts. Corrales emphasized that the primary issue is affordability.
The median home sale price in June reached a record high of $442,525, with the average rate on a 30-year mortgage at 6.92%. In addition to purchase prices and elevated mortgage rates, prospective buyers are also facing rising costs linked to insurance, property taxes, homeowners association fees, and other ownership expenses that have been affected by inflation.
This widespread lack of affordability has led to a notable decline in home sales nationwide, with Redfin reporting that sales dropped by 0.5% in June, signifying the largest monthly decline since October. Year-over-year, sales fell by 1.1% and were 21.5% lower than levels seen before the pandemic.