Realtors are facing an unprecedented number of buyers walking away from home purchase agreements, with a report from Redfin revealing that nearly 56,000 contracts fell through in June. This figure represents 15% of all homes that were under contract that month, marking the highest percentage ever recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed this trend to increasingly selective buyers who are navigating a challenging and expensive housing market. She noted that many are choosing to back out of deals over minor issues, feeling that the high monthly costs associated with purchasing a home today necessitate getting every item on their must-have list.
In Miami, Redfin agent Rafael Corrales reported “nightmare scenarios” where buyers canceled purchases due to small details. Last month, approximately 2,500 home purchases were canceled in Miami, which accounted for around 17.6% of homes that went under contract in June. Corrales emphasized that the main problem continues to be affordability.
In June, the median home sale price hit a record high of $442,525, while the average interest rate for a 30-year mortgage reached 6.92%. Beyond the high prices of homes, prospective buyers are also burdened with additional costs such as insurance, property taxes, and HOA fees, all of which have been impacted by inflation.
The nationwide affordability crisis is reflected in the housing market’s performance, with Redfin reporting that home sales experienced their largest decline in eight months. Sales dropped by 0.5% in June compared to the previous month, marking the steepest decrease since October 2023. Year-over-year, sales fell 1.1% and were 21.5% below levels seen before the pandemic.