Realtors are facing an unprecedented surge in buyers backing out of home purchase agreements, as potential homeowners become increasingly selective in a challenging real estate market.
In June, nearly 56,000 home purchase agreements were reported to have fallen through, accounting for 15% of all homes that went under contract that month. This figure represents the highest percentage recorded for June by Redfin, a prominent real estate site.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers who are walking away from deals due to minor issues, primarily because the financial implications of purchasing a home today make it crucial for them to fulfill their must-have criteria.
Zubiate stated, “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.”
Rafael Corrales, a Redfin agent in Miami, reported experiencing significant cancellations as well, with around 2,500 home purchases canceled in the area last month, translating to 17.6% of the homes that went under contract in June. He emphasized that affordability remains the predominant challenge for buyers.
The median home sale price soared to a record $442,525 in June, coupled with an average 30-year mortgage rate of 6.92%. Prospective buyers are also burdened by additional costs such as insurance, property taxes, and homeowners association fees, all of which have been intensified by inflation.
This affordability crisis has led to the most significant decline in home sales across the country in eight months, according to Redfin. Month-over-month, home sales decreased by 0.5% in June, marking the largest dip since October 2023. Year-over-year, sales fell by 1.1% and were 21.5% below pre-pandemic levels.