Realtors are experiencing a surge of buyers backing out of home purchase agreements, a trend attributed to rising selectivity among potential homeowners in the challenging real estate market.
According to a recent Redfin report, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract during that month. This marks the highest percentage recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, noted that buyers are increasingly hesitant due to rising costs. She explained that many buyers are withdrawing because they consider the monthly expenses associated with homeownership too high to settle for anything less than their complete wish list.
In Miami, Redfin agent Rafael Corrales reported “nightmare scenarios” where small issues led to last-minute cancellations. Last month alone, approximately 2,500 home purchases were canceled in Miami, representing about 17.6% of homes that went under contract in June. Corrales cited affordability as the primary concern driving these decisions.
The median home sale price hit a record high of $442,525 in June, while the average mortgage rate for a 30-year loan stood at 6.92%. In addition to high home prices and mortgage rates, potential buyers face further financial pressure from insurance, property taxes, HOA fees, and additional homeownership costs, all worsened by inflation.
Nationwide, the lack of affordability has contributed to the largest decline in home sales in eight months, as reported by Redfin. Home sales decreased by 0.5% in June compared to the previous month, representing the largest decline since October 2023. Year-over-year, home sales dropped by 1.1% and were 21.5% lower than pre-pandemic levels.