Realtors are encountering an increasing number of buyers who are backing out of home purchases, as more people become discerning amid a challenging real estate market.
A report from Redfin revealed that nearly 56,000 home-purchase agreements were canceled in June, equivalent to 15% of all homes that went under contract that month. This marks the highest percentage for any June reported by the site.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in withdrawn offers to a more selective buying public struggling in a pricier market. “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,” she explained.
Rafael Corrales, another Redfin agent based in Miami, noted that he has witnessed “nightmare scenarios” including last-minute cancellations driven by trivial details. In June alone, approximately 2,500 home purchases were canceled in Miami, accounting for around 17.6% of homes under contract that month. Corrales emphasized that the primary concern is affordability.
The median home sale price reached a historic $442,525 in June, with the average rate for a 30-year mortgage at 6.92%. In addition to these elevated home prices and persistent mortgage rates, prospective buyers are burdened by increasing costs such as insurance, property taxes, HOA fees, and other expenses tied to homeownership, all exacerbated by inflation.
The nationwide lack of affordability has led to the most significant decline in home sales in eight months, according to Redfin. Month-over-month, home sales fell by 0.5% in June, marking the largest decrease since October. Year-over-year, sales dropped by 1.1% and are down 21.5% from pre-pandemic levels.