Realtors are facing an unprecedented number of buyers backing out of home purchases, as increasing selectivity among buyers emerges in a challenging real estate environment.
According to a recent report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, which represents 15% of all homes that entered contracts that month. This marks the highest percentage recorded for any June by the platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this rise in cancellations to buyers who are more discerning due to the high costs associated with purchasing a home. She noted that many are withdrawing from deals due to minor concerns, as the financial implications of buying a home today can be daunting.
In Miami, Redfin agent Rafael Corrales reported that he has witnessed extreme cases of deal cancellations over trivial issues. Last month, around 2,500 home purchases were called off in Miami, accounting for approximately 17.6% of homes that went under contract. He emphasized that the primary concern among buyers is affordability.
In June, the median home sale price reached a record high of $442,525, while the average rate for a 30-year mortgage rose to 6.92%. Prospective buyers are further challenged by escalating insurance costs, property taxes, homeowners’ association fees, and additional expenses that inflation has worsened.
The increasing unaffordability in the housing market has led to a significant decline in home sales, which saw its biggest drop in eight months, as reported by Redfin. Month-over-month, home sales decreased by 0.5% in June, marking the most significant decline since October 2023. Year-over-year comparisons also showed a 1.1% decrease in home sales, which were down 21.5% from pre-pandemic levels.