Realtors are experiencing an unprecedented number of buyers withdrawing from home purchases as customers become more selective in a challenging real estate market.
A report from Redfin reveals that nearly 56,000 home purchase agreements fell through in June, representing 15% of all homes under contract that month—the highest rate recorded for June to date.
Julie Zubiate, a Redfin Premier real estate agent serving the San Francisco Bay Area, attributes this trend to buyers being more discerning, especially given the mounting costs associated with buying a home.
“They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to rationalize not getting everything on their must-have list,” Zubiate explained.
In Miami, Redfin agent Rafael Corrales reported witnessing “nightmare scenarios” of last-minute cancellations over trivial factors. He noted that around 2,500 home purchases were canceled in Miami last month, translating to approximately 17.6% of homes that went under contract in June. However, Corrales indicated that affordability remains the most significant concern.
The median home sale price hit a record $442,525 in June, while the average rate for a 30-year mortgage was 6.92%. Prospective buyers are further burdened by rising insurance rates, property taxes, HOA fees, and other costs related to homeownership, all exacerbated by inflation.
Nationally, the lack of affordability has led to the largest decline in home sales in eight months, with Redfin reporting a 0.5% drop in June—the most significant decrease since October 2023. Year-over-year sales also fell by 1.1% and were 21.5% lower than pre-pandemic figures.