Realtors are experiencing an increase in buyers backing out of home purchases, as many individuals are becoming more selective in a challenging real estate environment.
According to a report from Redfin released Tuesday, nearly 56,000 home purchase agreements were canceled in June, translating to 15% of all homes that entered contracts that month. This figure represents the highest percentage of cancellations recorded for any June by the real estate site.
Julie Zubiate, a real estate agent with Redfin Premier in the San Francisco Bay Area, attributed the rise in buyer indecision to the challenges posed by a more expensive housing market. She noted that buyers are walking away due to minor issues because the costs involved in purchasing a home today are substantial enough that they feel compelled to secure every aspect on their must-have lists.
Rafael Corrales, a Redfin agent in Miami, remarked on the drastic scenarios he has witnessed, including last-minute cancellations over minor details. In Miami alone, around 2,500 home purchases were canceled in June, amounting to approximately 17.6% of the homes that went under contract. Corrales indicated that the primary issue facing buyers is affordability.
The median home sale price hit a record high of $442,525 in June, coinciding with an average 30-year mortgage rate of 6.92%. In addition to the elevated home prices and ongoing high mortgage rates, potential buyers are also confronted with increased costs for insurance, property taxes, and HOA fees, all of which have intensified due to rising inflation.
Due to these affordability challenges nationwide, home sales have seen their most significant drop in eight months, Redfin reported. Monthly home sales decreased by 0.5% in June, marking the largest decline since October 2023. Year-on-year, home sales fell by 1.1% and sat 21.5% below pre-pandemic levels.