Realtors are facing an unprecedented number of buyers withdrawing from home purchases, as potential buyers become increasingly selective in a challenging real estate climate.
In June, nearly 56,000 home-purchase agreements fell through, representing 15% of all homes that went under contract for the month, according to a report from Redfin released on Tuesday. 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, cited the uptick in buyer hesitancy as a result of a more discerning clientele struggling with increased costs in the housing market.
“They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to justify not getting everything on their must-have list,” Zubiate explained.
Rafael Corrales, a Redfin agent in Miami, noted troubling trends, including last-minute cancellations over minor details. In Miami alone, approximately 2,500 home purchases were canceled last month, accounting for about 17.6% of homes that went under contract in June. Corrales attributed the primary concern to issues of affordability.
The median home sale price reached a record high of $442,525 in June, while the average rate for a 30-year fixed mortgage stood at 6.92%. Prospective buyers are further burdened by insurance costs, property taxes, homeowners association fees, and other expenses linked to homeownership, all of which have been intensified by inflation.
The nationwide lack of affordability has caused home sales to experience the steepest decline in eight months, as recorded by Redfin. Home sales fell by 0.5% in June compared to the previous month, marking the largest decrease since October 2023. Year-over-year, home sales declined by 1.1% and were 21.5% lower than pre-pandemic figures.