Realtors are facing a surge in buyers backing out of home purchases, as consumers become increasingly selective in a challenging real estate market.
A recent report from Redfin indicated that nearly 56,000 home-purchase agreements fell through in June, which accounts for 15% of all homes that went under contract that month. This marks the highest rate for any June recorded by the real estate firm.
Julie Zubiate, a Redfin Premier agent based in the San Francisco Bay Area, attributes the rise in cancellations to buyers becoming more discerning due to the high costs associated with home purchases. “They’re canceling due to minor issues because the monthly expenses tied to buying a home today are simply too high to overlook any deficiencies on their must-have list,” Zubiate explained.
In Miami, Redfin agent Rafael Corrales noted some “nightmare scenarios,” with numerous last-minute cancellations triggered by small details. Approximately 2,500 home purchases were canceled in Miami last month, representing about 17.6% of homes that went under contract. Corrales pointed out that affordability remains the primary concern for buyers.
The median sale price for homes reached a record high of $442,525 in June, while the average rate on a 30-year mortgage stood at 6.92%. Along with steep home prices and persistently high mortgage rates, potential buyers are also facing additional financial burdens from insurance, property taxes, HOA fees, and other ownership costs, all impacted by inflation.
The widespread lack of affordability has led to the largest decline in home sales in eight months, as reported by Redfin. On a monthly basis, home sales decreased by 0.5% in June, marking the most significant drop since October 2023. Year-over-year, sales fell by 1.1% and remain 21.5% below pre-pandemic levels.