Realtors are experiencing a surge in homebuyers backing out of purchase agreements as the current real estate market becomes increasingly challenging. According to a recent report by Redfin, nearly 56,000 home purchase agreements were canceled in June, representing 15% of all homes that went under contract during that month, marking the highest recorded percentage for June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to more discerning buyers who are now more hesitant to commit due to elevated housing costs. She notes that buyers are reluctant to settle for less, especially since the financial implications of purchasing a home are substantial.
In Miami, Redfin agent Rafael Corrales has witnessed troubling scenarios where buyers are backing out due to minor concerns. In June, around 2,500 home purchases were canceled in Miami, accounting for approximately 17.6% of homes under contract that month. Corrales emphasizes that affordability remains a pressing issue for buyers.
The median home sale price surged to a record $442,525 in June, compounded by a 30-year mortgage rate averaging 6.92%. The numerous costs associated with homeownership—including insurance, property taxes, and homeowners association fees—are further straining potential buyers, particularly in an environment marked by inflation.
This growing lack of affordability nationwide has led to a significant decline in home sales, with Redfin reporting a 0.5% month-over-month drop in June, the largest decrease since October of last year. Year-over-year, home sales fell by 1.1% and were 21.5% below pre-pandemic levels.
Despite these challenges, the real estate market might still adapt. As buyers reassess their must-haves, sellers may also adjust their expectations and property prices, potentially creating a more balanced market in the future. Homebuyers could also find new opportunities as the market shifts, leading to potentially more favorable buying conditions down the line.