Realtors are currently experiencing a significant increase in buyers backing out of home purchases as they become more selective amid challenging market conditions.
According to a report from Redfin, nearly 56,000 agreements to buy homes fell through in June, representing 15% of all homes that went under contract that month. This marks the highest percentage recorded in June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers who are now more discerning and struggling with rising costs in the 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, a Redfin agent based in Miami, reported seeing “nightmare scenarios” unfold, with last-minute cancellations over trivial details. Approximately 2,500 home purchases were canceled in Miami in June, accounting for about 17.6% of homes that were under contract. Corrales highlighted that the primary concern remains affordability.
In June, the median home sale price surged to a record $442,525, while the average rate for a 30-year mortgage reached 6.92%. In addition to these high home prices and elevated mortgage rates, potential buyers are burdened by insurance, property taxes, HOA fees, and other costs of homeownership, all of which have been intensified by inflation.
The lack of affordability in the housing market across the nation has led to the most significant decline in home sales in the past eight months, as reported by Redfin. Month-over-month, home sales dropped by 0.5% in June, marking the largest decline since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% lower compared to pre-pandemic figures.