Realtors are experiencing a surge in buyers backing out of home purchases, as many individuals become increasingly selective in the current challenging real estate market.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements were abandoned in June, accounting for 15% of all contracts signed that month, marking the highest percentage recorded for any June.
Julie Zubiate, a real estate agent with Redfin in the San Francisco Bay Area, attributed this trend to buyers’ heightened scrutiny amid rising 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 rationalize not getting everything on their must-have list,” she noted.
Similarly, Rafael Corrales, a Redfin agent in Miami, reported experiencing numerous last-minute cancellations over trivial details. Approximately 2,500 home purchases were canceled in Miami last month, representing around 17.6% of contracts signed in June. However, he emphasized that the main concern is affordability.
In June, the median home sale price climbed to a record $442,525, while the average rate for a 30-year mortgage reached 6.92%. In addition to high property prices and persistent mortgage rates, potential homebuyers are also contending with rising insurance, property taxes, homeowners association fees, and other expenses tied to homeownership, all worsened by inflation.
The nationwide affordability crisis has led to a significant decline in home sales, the largest in eight months, according to Redfin. Month-over-month sales dropped by 0.5% in June, the steepest decline since October 2022. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic figures.