Realtors are experiencing an unprecedented number of buyers withdrawing from home purchases as consumers become more selective in a challenging real estate environment.
A report from Redfin reveals that 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 for any June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributes the increase in hesitant buyers to the pressures of 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, another Redfin agent operating in Miami, reported experiencing distressing situations, including last-minute cancellations over trivial matters. In Miami alone, approximately 2,500 home purchases were called off in June, constituting about 17.6% of homes that went under contract that month. Corrales emphasized that the main concern remains affordability.
In June, the median home sale price soared to a record $442,525, while the average rate for a 30-year mortgage reached 6.92%. In addition to elevated home prices and high mortgage rates, prospective buyers face increased expenses from insurance, property taxes, homeowners association fees, and other costs of homeownership, all intensified by inflation.
This combination of affordability issues has prompted a significant decline in home sales nationwide, marking the largest drop in eight months, as per Redfin. Home sales experienced a monthly decrease of 0.5% in June, the most substantial decline since October 2022. Year-over-year, home sales fell by 1.1% and reached 21.5% below pre-pandemic levels.