Realtors are encountering an unprecedented number of buyers backing out of home purchases, as individuals become more selective in a challenging real estate market.
According to a Redfin report released on Tuesday, nearly 56,000 home-purchase agreements were canceled in June, which accounts for 15% of all homes that went under contract during that month. This is the highest percentage recorded for any June by the real estate site.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributes the increase in buyer hesitations to the climbing costs associated with home purchases. She remarked that buyers are withdrawing over minor issues, as the monthly expenses tied to buying a home are increasingly difficult to justify without fulfilling all their requirements.
Meanwhile, Rafael Corrales, a Redfin agent in Miami, has witnessed distressing situations with last-minute cancellations attributed to small details. In Miami alone, approximately 2,500 home purchases were canceled in June, representing around 17.6% of the contracts signed that month. Corrales noted that the primary concern remains affordability.
In June, the median home sale price hit a record high of $442,525, while the average rate on a 30-year mortgage stood at 6.92%. Prospective buyers also face additional financial burdens such as insurance, property taxes, homeowner association (HOA) fees, and other costs tied to homeownership that have been intensified by inflation.
The ongoing affordability crisis across the nation has led to the steepest drop in home sales in eight months, as reported by Redfin. Home sales declined by 0.5% in June compared to the previous month—the largest decrease since October 2023. Year-over-year, home sales fell by 1.1% and are currently 21.5% below pre-pandemic levels.