Realtors are encountering a significant increase in buyers backing out of home purchases, as potential homeowners become more selective in a challenging real estate market. According to a report from Redfin, nearly 56,000 home-purchase agreements fell through in June, accounting for 15% of all homes that were under contract that month, marking the highest cancellation rate for June on record.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers being highly selective, often withdrawing due to minor issues as they struggle with the high costs associated with home purchases today. She emphasized that the monthly expenses have become too significant for buyers to overlook their must-have features in a home.
Rafael Corrales, a Redfin agent in Miami, reported experiencing troubling situations with last-minute cancellations over trivial details. Last month, approximately 2,500 home purchases in Miami were canceled, representing about 17.6% of homes under contract in June. Corrales pointed out that the primary concern remains affordability.
The median home sale price in June reached an all-time high of $442,525, with the average interest rate on a 30-year mortgage at 6.92%. In addition to escalating home prices and high mortgage rates, potential buyers are facing increased costs from insurance, property taxes, HOA fees, and other expenses associated with homeownership, all of which have been further impacted by inflation.
This decline in affordability across the nation has led to the most significant decrease in home sales in eight months, per Redfin’s analysis. Home sales dropped by 0.5% in June compared to the previous month, marking the largest decline since October 2023. Year-over-year, home sales fell by 1.1% and were recorded at 21.5% below levels seen before the pandemic.