Realtors are facing an unprecedented number of buyers backing out of home-purchase agreements as the real estate market becomes increasingly challenging. According to a report by Redfin, nearly 56,000 agreements were abandoned in June, accounting for 15% of all contracts that month, marking the highest percentage recorded for June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to more selective buyers who are navigating a costly housing market. She noted that buyers are withdrawing over minor issues, emphasizing that the high monthly costs of homeownership make them hesitant to compromise on their essential requirements.
In Miami, Redfin agent Rafael Corrales described “nightmare scenarios” of last-minute cancellations largely driven by minor details. Approximately 2,500 home transactions were called off in Miami in June, translating to about 17.6% of homes under contract in the area. Corrales highlighted that affordability remains the primary concern for buyers.
The median home sale price hit a record $442,525 in June, while the average rate for a 30-year mortgage rose to 6.92%. Beyond the elevated home prices and mortgage rates, buyers are also contending with rising insurance costs, property taxes, homeowners association fees, and other expenses related to homeownership that have been impacted by inflation.
The nationwide housing market’s lack of affordability has contributed to a significant decline in home sales, with Redfin reporting the largest drop in eight months. Home sales decreased by 0.5% in June compared to the previous month, marking the largest decline since October 2022. Year-over-year, home sales fell by 1.1% and were 21.5% lower than levels prior to the pandemic.