Realtors are experiencing an unprecedented number of buyers backing out of home deals, as prospective homeowners become more discerning in light of the challenging real estate market.
According to a report from Redfin, approximately 56,000 home-purchase agreements fell through in June, representing 15% of all homes that went under contract that month, marking the highest percentage recorded in June by the platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increased indecision to buyers who are more selective and facing a costly market. “They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to rationalize not getting everything on their must-have list,” Zubiate explained.
Rafael Corrales, a Redfin agent in Miami, reported witnessing “nightmare scenarios,” including last-minute cancellations over trivial details. In June, around 2,500 home purchases were canceled in Miami, equivalent to about 17.6% of homes under contract that month. Corrales emphasized that affordability remains the primary concern.
The median home sale price reached a record high of $442,525 in June, accompanied by an average mortgage rate of 6.92% for a 30-year loan. In addition to high home prices and elevated mortgage rates, buyers are also faced with challenges related to insurance, property taxes, HOA fees, and other expenses tied to homeownership, all of which have been intensified by inflation.
The national decline in affordability has triggered the largest drop in home sales in eight months, according to Redfin. Month-over-month, home sales dipped by 0.5% in June, marking the most significant decline since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than pre-pandemic levels.