Realtors are experiencing an increasing number of buyers backing out of home purchases as individuals grow more selective in a challenging real estate market. According to a report from Redfin, nearly 56,000 home-purchase agreements failed in June, amounting to 15% of all homes that went under contract that month, marking the highest percentage for any June recorded by the platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributes the rise in buyers changing their minds to a more discerning clientele facing a costly market. She noted that buyers are withdrawing due to minor concerns, as the monthly costs of homeownership are becoming difficult to justify without meeting all their criteria.
In Miami, another Redfin agent, Rafael Corrales, has observed troubling trends, including last-minute cancellations over trivial details. In June, around 2,500 home purchases in Miami were canceled, representing about 17.6% of homes that went under contract that month. Corrales emphasized that the primary issue is affordability.
The median home sale price hit a record high of $442,525 in June, while the average rate for a 30-year mortgage rose to 6.92%. In addition to the steep prices of homes, potential buyers are grappling with the compounded costs of insurance, property taxes, homeowners’ association fees, and other expenses related to homeownership, all worsened by inflation.
The nationwide lack of affordability has led to the largest decline in home sales in eight months, as detailed by Redfin. Monthly home sales fell by 0.5% in June, the most significant drop since October 2023. Year over year, home sales decreased by 1.1% and are currently 21.5% below pre-pandemic levels.