Realtors are facing an unprecedented number of buyers backing out of home purchases, as consumer expectations rise amidst a challenging real estate market.
According to a report from Redfin, nearly 56,000 home-purchase agreements were terminated in June, representing 15% of all homes that went under contract during that month. This marks the highest percentage for any June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed the uptick in cancellations to more discerning buyers who are struggling with the current high costs of homeownership. She noted that buyers are often retracting their offers due to minor issues, as the financial burden of purchasing a home today is significant.
Similarly, Rafael Corrales, a Redfin agent in Miami, reported experiencing “nightmare scenarios” resulting from last-minute deal cancellations over trivial matters. In Miami alone, around 2,500 home purchases were canceled in June, amounting to approximately 17.6% of contracts in that month. Corrales emphasized that the primary issue stemmed from affordability.
The median home sale price reached a record high of $442,525 in June, with an average 30-year mortgage rate of 6.92%. In conjunction with soaring home prices and ongoing elevated mortgage rates, prospective buyers are also facing additional expenses like insurance, property taxes, and homeowners’ association fees, all of which have been worsened by inflation.
As a consequence of these affordability challenges, the national housing market has experienced its most significant decline in home sales in eight months, with a 0.5% decrease in sales from the previous month in June, the largest monthly drop since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than levels seen before the pandemic.