Realtors are facing an unprecedented number of buyers backing out of home purchases as individuals become increasingly selective in a challenging real estate market.
According to a report from Redfin released on Tuesday, nearly 56,000 home-purchase agreements fell through in June, accounting for 15% of all contracts signed that month. This represents the highest percentage of cancellations recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes this trend to buyers who are navigating a more expensive housing market. She noted that buyers are withdrawing due to minor issues, as the monthly costs of homeownership have become too burdensome to overlook.
Rafael Corrales, another Redfin agent operating in Miami, described troubling scenarios arising from last-minute cancellations over small details. In Miami alone, around 2,500 home purchases were canceled last month, translating to about 17.6% of homes under contract in June. He emphasized that affordability remains the primary concern for buyers.
The median home sale price reached an all-time high of $442,525 in June, with the average interest rate on a 30-year mortgage at 6.92%. Prospective buyers are also grappling with additional expenses such as insurance, property taxes, HOA fees, and other costs linked to homeownership, all heightened by inflation.
The ongoing lack of affordability has resulted in the most significant decline in home sales nationwide in eight months, according to Redfin. Monthly home sales dropped by 0.5% in June, marking the largest decrease since October 2022. Year over year, home sales fell by 1.1%, and they remain 21.5% lower than levels seen before the pandemic.