Realtors are facing an increasing number of buyers backing out of home purchases, as the challenging real estate market leads to heightened selectivity among potential buyers.
According to a report from Redfin, approximately 56,000 home-purchase agreements were canceled in June, amounting to 15% of all homes that went under contract that month. This marks the highest percentage of cancellations recorded for June.
Julie Zubiate, a Redfin Premier real estate agent in San Francisco, attributes this trend to buyers becoming more discerning, particularly due to rising costs in the housing market. She noted that buyers are opting out of deals over minor concerns, as the monthly expenses tied to homeownership have become too substantial to overlook.
Rafael Corrales, another Redfin agent based in Miami, reported experiencing “nightmare scenarios” with last-minute cancellations prompted by trivial details. In June, around 2,500 home purchases were canceled in Miami, representing 17.6% of homes that were under contract. However, Corrales emphasized that the primary concern revolves around affordability.
The median home sale price hit an all-time high of $442,525 in June, coinciding with an average 30-year mortgage rate of 6.92%. In addition to high property prices and elevated mortgage rates, potential buyers are also facing challenges from insurance, property taxes, homeowners association fees, and other costs associated with owning a home, all of which have been impacted by inflation.
Nationwide affordability issues have led to the most significant decrease in home sales in eight months, as reported by Redfin. Home sales dropped 0.5% from the previous month in June, marking the largest decline since October 2023. Comparatively, year-over-year home sales fell by 1.1% and were 21.5% below levels seen before the pandemic.