Realtors are facing an increasing number of buyers backing out of home purchase agreements, as individuals become more particular in a challenging real estate landscape.
According to a report from Redfin released on Tuesday, nearly 56,000 agreements fell through in June, which equates to 15% of all homes placed under contract that month. This marks the highest percentage recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent from the San Francisco Bay Area, attributes this trend to buyers who are becoming more selective due to the rising costs in the housing market. She noted, “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.”
In Miami, Redfin agent Rafael Corrales observed troubling scenarios, including last-minute cancellations over trivial concerns. Approximately 2,500 home purchases were called off in Miami last month, making up about 17.6% of homes that went under contract in June. Corrales emphasized that the core issue remains affordability.
The median home sale price hit a record high of $442,525 in June, while the average rate on a 30-year mortgage reached 6.92%. Alongside the steep home prices and elevated mortgage rates, potential buyers are also facing additional financial burdens from insurance, property taxes, HOA fees, and other costs tied to homeownership, all intensified by inflation.
This lack of affordability has led to a significant decline in home sales nationwide, with Redfin reporting the largest decrease in eight months. Home sales fell by 0.5% in June compared to the previous month, marking the most considerable drop since October 2023. Year-over-year, sales decreased by 1.1% and were 21.5% lower than pre-pandemic figures.