Realtors are witnessing an increase in buyers backing out of home purchases, as a more discerning clientele navigates a challenging real estate landscape.
A recent report from Redfin highlights that nearly 56,000 home-purchase agreements were canceled in June, constituting 15% of all homes that entered contracts that month. This marks the highest percentage recorded for any June since the platform’s inception.
According to Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, buyers are becoming more hesitant due to the high costs tied to purchasing a home. “They’re withdrawing for minor reasons because the monthly expenses associated with buying a home today are just too steep to overlook without getting everything on their must-have list,” Zubiate explained.
Rafael Corrales, another Redfin agent based in Miami, noted he has encountered “nightmare scenarios” with clients canceling agreements at the last minute over trivial issues. In Miami alone, approximately 2,500 home sales were called off in June, which accounts for around 17.6% of homes that had contracts that month. The primary concern for many buyers is affordability.
The median home sale price surged to a historic $442,525 in June, while the average rate for a 30-year mortgage reached 6.92%. Along with the high property prices and elevated mortgage rates, potential buyers are facing additional burdens such as insurance, property taxes, and homeowners association fees, all heightened by inflation.
This lack of affordability is contributing to the most significant decline in home sales observed in the past eight months, according to Redfin. Month-over-month, home sales saw a decrease of 0.5% in June, representing the largest decline since October 2023. Year-over-year, sales declined by 1.1%, sitting 21.5% below pre-pandemic figures.