Realtors are facing an increasing number of buyers backing out of home purchase agreements as consumers become more selective amidst challenging real estate conditions.
According to a recent report from Redfin, nearly 56,000 home-purchase deals fell through in June, accounting for 15% of all homes under contract that month. This marks the highest cancellation rate for any June on record for the real estate service.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed the trend to buyers’ heightened selectivity in a costly market. She noted that buyers are choosing to withdraw from deals over minor issues, as the financial implications of home buying are significant.
In Miami, Redfin agent Rafael Corrales reported witnessing numerous last-minute cancellations driven by small details. In June, approximately 2,500 home purchases were called off in the city, which represents about 17.6% of homes that were under contract. Corrales highlighted that the primary challenge remains affordability.
The median home sale price in the U.S. reached an unprecedented $442,525 in June, while the average rate for a 30-year mortgage hit 6.92%. Coupled with high home prices, elevated mortgage rates, and additional expenses such as insurance, property taxes, and HOA fees, the overall costs of homeownership have been impacted by inflation.
The nationwide decline in affordability has led to a notable drop in home sales, marking the largest decline in eight months. Redfin reported a 0.5% decrease in home sales month-over-month in June, the steepest decline since October 2023. Year-over-year, home sales fell 1.1% and were 21.5% lower than pre-pandemic levels.