Realtors are facing an unprecedented number of buyers who are backing out of home purchases, as potential buyers become more selective in the current challenging real estate market.
A recent report from Redfin revealed that nearly 56,000 home purchase agreements were terminated in June, representing 15% of all homes that went under contract that month. This figure marks the highest percentage recorded for June by Redfin.
Julie Zubiate, a real estate agent with Redfin Premier in the San Francisco Bay Area, attributes this trend to buyers being more discerning while contending with elevated market prices. “They are backing out due to minor issues because the monthly costs tied to buying a home today are just too high to justify not getting everything on their must-have list,” Zubiate stated.
Rafael Corrales, another Redfin agent in Miami, noted that he has witnessed “nightmare scenarios,” including last-minute cancellations over trivial details. Last month, about 2,500 home purchases were canceled in Miami, which corresponds to approximately 17.6% of homes that went under contract in June. However, Corrales emphasized that the primary concern remains affordability.
The median home sale price hit a record $442,525 in June, with the average interest rate for a 30-year mortgage reaching 6.92%. In addition to elevated home prices and mortgage rates, potential buyers are facing challenges from increased insurance costs, property taxes, homeowners association fees, and other expenses related to homeownership that have been heightened by inflation.
This lack of affordability in the housing market across the country has contributed to the most significant drop in home sales in eight months, according to Redfin. Monthly home sales decreased by 0.5% in June, marking the largest decline since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than pre-pandemic levels.