Realtors are facing an increasing number of buyers who are backing out of home purchases, reflecting a growing selectivity within a challenging real estate market.
According to a report by Redfin released on Tuesday, nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that went under contract that month. This marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers who are more discerning and struggling with the higher costs in today’s market. She noted that buyers are canceling deals over minor issues, as the financial implications of purchasing a home have become increasingly burdensome.
Miami Redfin agent Rafael Corrales reported similar experiences, observing “nightmare scenarios” where clients pull out at the last minute due to trivial concerns. In June alone, around 2,500 home purchases were canceled in Miami, amounting to about 17.6% of contracts signed that month. Corrales emphasized that affordability is the main concern affecting buyers.
The median home sale price hit a record high of $442,525 in June, while the average interest rate for a 30-year mortgage rose to 6.92%. Potential buyers are also facing additional financial pressures, including insurance, property taxes, homeowner association fees, and other costs that have increased due to inflation.
This pervasive lack of affordability has led to a significant decline in home sales across the country, as reported by Redfin. Home sales fell by 0.5% in June compared to the previous month, marking the largest decline since October 2023. Year-over-year, sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.