Realtors are facing an increase in buyers backing out of home purchases, with many becoming more selective in a challenging real estate landscape.
According to a recent Redfin report, nearly 56,000 home-purchase agreements were canceled in June, which accounts for 15% of all homes that went under contract that month. This marks the highest cancellation rate for June recorded by Redfin.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed this trend to buyers reconsidering their decisions over minor issues due to the high costs associated with homeownership. She noted that the financial implications are so significant that buyers are unwilling to compromise on their must-have lists.
Rafael Corrales, a Redfin agent in Miami, reported experiencing “nightmare scenarios,” including last-minute cancellations triggered by small details. In Miami, around 2,500 home purchases were canceled in June, representing approximately 17.6% of homes that were under contract. Corrales emphasized that affordability remains the primary concern for buyers.
The median home sale price soared to a record $442,525 in June, with the average 30-year mortgage rate reaching 6.92%. Prospective homebuyers are also contending with additional expenses such as insurance, property taxes, and HOA fees, all impacted by inflation.
The continuing lack of affordability has contributed to a significant drop in home sales, which saw the largest decline in eight months, according to Redfin. Month-over-month, home sales decreased by 0.5% in June, marking the most considerable reduction since October 2023. Comparatively, year-over-year home sales fell by 1.1% and were 21.5% below levels seen before the pandemic.