Realtors are facing an unprecedented number of buyers backing out of home purchases as individuals become more selective in a challenging real estate market.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements fell through in June, accounting for 15% of all homes that went under contract during the month. This marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in last-minute cancellations to a more discerning buyer demographic struggling with high costs. She noted that buyers are opting out over minor issues, feeling the pressure of escalating monthly expenses associated with homeownership.
In Miami, Redfin agent Rafael Corrales reported witnessing “nightmare scenarios” where buyers canceled deals at the last minute due to small concerns. He indicated that around 2,500 home purchases were abandoned in the area last month, which represents approximately 17.6% of homes that went under contract. Corrales highlighted that affordability remains the predominant issue for buyers.
In June, the median home sale price reached an all-time high of $442,525, while the average rate for a 30-year mortgage stood at 6.92%. Additionally, prospective buyers are facing the cumulative burden of insurance, property taxes, HOA fees, and other ownership costs that have been affected by inflation.
This lack of affordability has led to a notable decline in home sales across the U.S., as reported by Redfin. Month-over-month, home sales dipped by 0.5% in June, marking the most significant drop since October 2023. Year-over-year, sales fell by 1.1% and were down 21.5% compared to levels before the pandemic.