Realtors are experiencing an unprecedented number of buyers pulling out of home purchase agreements, as consumers become more selective in a challenging real estate market.
A report from Redfin revealed that almost 56,000 home-purchase agreements fell through in June, accounting for 15% of all homes that went under contract that month. This marks the highest percentage of cancellations recorded for any June by the real estate website.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed this trend to buyers who are hesitant and seeking to meet all their criteria in a time of rising costs. “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,” she explained.
Rafael Corrales, a Redfin agent in Miami, observed similar patterns, citing “nightmare scenarios” where buyers cancel deals at the last minute over trivial details. In June, approximately 2,500 home purchases were canceled in Miami, or about 17.6% of homes that had gone under contract. Corrales noted that the primary concern for buyers is affordability.
In June, the median home sale price reached an all-time high of $442,525, with the average rate for a 30-year mortgage hitting 6.92%. Along with the steep prices of homes, buyers are also grappling with additional costs such as insurance, property taxes, and HOA fees, which have all been impacted by inflation.
The overall lack of affordability in the housing market has led to a noticeable decline in home sales, with Redfin reporting the largest drop in eight months. Monthly home sales decreased by 0.5% in June, marking the greatest decline since October 2023. Year-over-year, home sales fell by 1.1% and are currently 21.5% lower than pre-pandemic levels.