Realtors are facing a surge in home buyers backing out of purchases, with a notable increase in cautiousness due to the challenging real estate market.
A Redfin report revealed that nearly 56,000 home-purchase agreements were terminated in June, representing 15% of all homes that went under contract that month, marking the highest percentage recorded for June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in buyers reconsidering their decisions to the current high costs of homeownership. She noted that buyers are backing out over minor issues as they feel pressured to ensure their must-have criteria are fully met given the expensive market conditions.
Rafael Corrales, a Redfin agent in Miami, echoed this sentiment, sharing observations of significant cancellations over small details. Approximately 2,500 home purchases were called off in Miami last month, which accounts for about 17.6% of homes that went under contract in June. He highlighted that the chief concern for buyers remains affordability.
As of June, the median home sale price reached a historic high of $442,525, alongside an average mortgage rate of 6.92%. In addition to high home prices and persistent mortgage rates, prospective buyers are also burdened by rising costs related to insurance, property taxes, and HOA fees, all exacerbated by inflation.
The national affordability crisis has led to a notable decline in home sales, with Redfin reporting a 0.5% drop in June, the most significant decline since October 2023. Year-over-year comparisons show a decrease of 1.1% in home sales, which is 21.5% below pre-pandemic levels.