Realtors are facing an unprecedented number of buyers pulling out of home purchases, with many becoming increasingly selective in the current challenging real estate market.
According to a report from Redfin, nearly 56,000 home purchase agreements were abandoned in June, representing 15% of all homes that went under contract that month. This marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed the increase in last-minute cancellations to buyers who are adjusting to a more expensive market. She noted that buyers are backing out over minor issues because the high monthly costs associated with homeownership make them unwilling to compromise on their essential requirements.
Rafael Corrales, another Redfin agent based in Miami, mentioned that he has encountered troubling situations, including cancellations at the last minute over trivial matters. He reported that roughly 2,500 home purchases were canceled in Miami last month, accounting for approximately 17.6% of homes that entered contracts in June. Corrales emphasized that the primary concern for buyers is affordability.
In June, the median home sale price reached a record high of $442,525, while the average 30-year mortgage interest rate was 6.92%. With home prices and mortgage rates remaining elevated, prospective homebuyers are also facing other financial burdens such as insurance, property taxes, and homeowners association fees, all of which have been exacerbated by inflation.
The nationwide lack of affordability has led to the most significant 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 declined by 1.1% and are down by 21.5% compared to pre-pandemic levels.