Realtors are facing a growing number of buyers who are backing out of home purchases, as potential homeowners become increasingly selective in a challenging real estate market.
A report from Redfin indicated that nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract that month, marking the highest rate recorded for any June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed this trend to buyers hesitating over minor issues, as the current monthly costs of homeownership are too significant for them to compromise on their must-have lists.
In Miami, agent Rafael Corrales reported experiencing “nightmare scenarios” involving last-minute cancellations based on small details. His observations highlighted that approximately 2,500 home purchases were canceled in Miami last month, accounting for about 17.6% of homes that went under contract in June. He emphasized that the primary issue remains affordability.
The median home sale price in June hit a record high of $442,525, while the average rate for a 30-year mortgage stood at 6.92%. In addition to the elevated home prices and high mortgage rates, buyers are also facing burdens from insurance, property taxes, Homeowner Association (HOA) fees, and other costs linked to homeownership, all of which have been impacted by inflation.
This nationwide lack of affordability has led to a significant decline in home sales, which fell by 0.5% in June, marking the largest monthly decrease since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% below pre-pandemic levels.