Realtors are facing an unprecedented number of buyers backing out of home purchases, as consumers become more selective amid a challenging real estate landscape.
In June, nearly 56,000 home-purchase agreements were canceled, representing 15% of all homes that went under contract that month. This figure, reported by Redfin, marks the highest percentage recorded for June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in cancellations to buyers who are more discerning, struggling with the expensive market. She noted that buyers are opting out over minor issues because the financial burden of home buying is significant.
Rafael Corrales, a Redfin agent based in Miami, described witnessing troubling situations with last-minute cancellations over trivial details. In Miami alone, about 2,500 home purchases were called off in June, accounting for 17.6% of homes that were under contract. Corrales highlighted that the primary concern remains affordability.
June saw the median home sale price hit a record $442,525, with the average 30-year mortgage rate at 6.92%. Besides the high home prices and prevailing mortgage rates, potential buyers are also facing additional financial strains from insurance, property taxes, HOA fees, and other associated costs, which have been driven up by inflation.
This lack of affordability has led to the most significant decline in home sales nationally in the past eight months. According to Redfin, home sales dropped by 0.5% in June compared to the previous month, marking the largest decrease since October 2023. Year-over-year comparisons show a dip of 1.1%, with sales 21.5% lower than pre-pandemic figures.