Realtors are facing an increasing number of buyers backing out of home purchases, as consumer selectivity rises in a challenging real estate market.
According to a report from Redfin, nearly 56,000 home-purchase agreements were abandoned in June, representing 15% of all homes under contract that month. This marks the highest percentage of failed contracts recorded in any June by the real estate company.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributed the trend to buyers becoming more selective amid high home costs. She noted that many are withdrawing from deals over minor issues because the overall financial burden of buying a home has become difficult to justify without meeting their complete list of requirements.
In Miami, Redfin agent Rafael Corrales reported experiencing what he termed “nightmare scenarios,” where clients canceled purchases at the last minute due to small details. In that city alone, around 2,500 home transactions were canceled in June, equating to 17.6% of the homes that went under contract. Corrales emphasized that the primary issue is affordability.
June also saw the median home sale price hit a record high of $442,525, while the average interest rate for a 30-year mortgage was 6.92%. Buyers are further burdened by ongoing expenses such as insurance, property taxes, and homeowners association fees, all of which have been impacted by inflation.
The overall lack of affordability is contributing to a significant decline in home sales across the nation, with Redfin reporting that sales experienced their largest monthly decrease in eight months. Home sales fell by 0.5% in June compared to the previous month, marking the most substantial drop since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.