Realtors are facing an unprecedented number of buyers withdrawing from home purchase agreements as consumers grow more discerning in a challenging real estate market.
According to a report from Redfin released on Tuesday, nearly 56,000 agreements to buy homes were canceled in June, representing 15% of all contracts initiated that month. This marks the highest percentage ever recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers’ heightened scrutiny amid rising prices. “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,” Zubiate stated.
In Miami, Redfin agent Rafael Corrales highlighted troubling situations arising from last-minute cancellations over small details, noting that approximately 2,500 home purchases were abandoned last month, equating to about 17.6% of contracts in June. He emphasized that the primary concern for buyers is affordability.
The median home sale price hit a record high of $442,525 in June, while the average 30-year mortgage rate stood at 6.92%. In addition to soaring home prices and elevated mortgage rates, prospective buyers are also contending with increased insurance costs, property taxes, HOA fees, and other expenses linked to homeownership, all of which have been impacted by inflation.
The persistent lack of affordability across the nation has led to a significant drop in home sales, the largest in the past eight months, according to Redfin. Home sales fell 0.5% month over month in June, marking the steepest decline since October 2023. Year-over-year, sales decreased by 1.1% and were 21.5% lower than levels observed before the pandemic.