Realtors are encountering an increasing number of buyers withdrawing from home purchases, as consumer preferences become more selective amid challenging conditions in the real estate market.
According to a report from Redfin, nearly 56,000 agreements to purchase homes were canceled in June, amounting to 15% of all homes that went under contract that month. This figure represents the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in buyers backing out to higher expectations amid a costly housing 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,” Zubiate explained.
Rafael Corrales, a Redfin agent in Miami, noted that he has witnessed troubling scenarios, including last-minute cancellations over small details. In Miami alone, about 2,500 home purchases were canceled last month, representing roughly 17.6% of contracts signed in June. Corrales emphasized that the primary concern for buyers is affordability.
The median sale price of homes reached an all-time high of $442,525 in June, with the average 30-year mortgage rate at 6.92%. With the elevated prices of homes and persistently high mortgage rates, prospective buyers are also facing challenges from insurance, property taxes, HOA fees, and other costs that have been worsened by inflation.
The ongoing affordability issues in the market have contributed to the steepest drop in home sales in eight months, as reported by Redfin. Monthly home sales decreased by 0.5% in June, marking the largest decline since October 2023. Year-over-year, home sales fell by 1.1% and are currently 21.5% below pre-pandemic levels.