Realtors are experiencing an unprecedented number of home buyers backing out of agreements, reflecting an increasingly selective buyer pool amid challenging real estate conditions.
According to a report from Redfin, nearly 56,000 home purchase agreements fell through in June, representing 15% of all homes that were contracted that month. This figure marks the highest percentage recorded for June by the real estate website.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes this trend to more discerning buyers who are navigating a higher-cost market. She explained that buyers are withdrawing due to minor issues, as the monthly expenses tied to homeownership are substantial enough that they hesitate to compromise on their essential requirements.
Similarly, Rafael Corrales, a Redfin agent in Miami, reported experiencing alarming situations, including cancellations at the last minute over trivial details. In Miami alone, about 2,500 home purchases were canceled in June, accounting for approximately 17.6% of contracts in the area. Corrales pointed out that the primary concern remains affordability.
The median home sale price reached a record high of $442,525 in June, while the average rate for a 30-year mortgage was 6.92%. Alongside the elevated home prices and persistent mortgage rates, prospective buyers are also faced with rising costs associated with insurance, property taxes, HOA fees, and other homeownership expenses that have been intensified by inflation.
This widespread lack of affordability has led to notable declines in home sales on a national scale, with Redfin reporting the biggest monthly drop in eight months. Home sales dipped by 0.5% in June, marking the largest decrease since October 2023. Comparatively, year-over-year sales fell by 1.1% and were 21.5% lower than pre-pandemic levels.