Realtors are facing an increasing number of buyers backing out of home purchase agreements, as individuals become more selective amid challenging market conditions.
In June alone, nearly 56,000 home-purchase agreements were terminated, accounting for 15% of all properties that went under contract that month, according to a report from Redfin released on Tuesday. This marks the highest percentage recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the surge in cancellations to buyers who are being particularly picky, often pulling out due to minor issues. She noted that the current high monthly costs associated with home buying make it difficult for buyers to settle for anything less than their ideal criteria.
Rafael Corrales, another Redfin agent based in Miami, described instances of “nightmare scenarios” where buyers canceled deals at the last minute over small details. In Miami, around 2,500 home purchases were canceled in June, representing approximately 17.6% of homes that were under contract during that period. Corrales emphasized that affordability remains the primary challenge for buyers.
The median sale price for homes reached a historic high of $442,525 in June, with the average interest rate on a 30-year mortgage at 6.92%. In addition to elevated home prices and mortgage rates, potential buyers face additional financial burdens, including insurance, property taxes, HOA fees, and other costs of homeownership that have been worsened by inflation.
This ongoing issue of affordability nationwide has contributed to a significant decline in home sales, which saw their largest drop in eight months, as noted by Redfin. Month-over-month, home sales decreased by 0.5% in June, marking the steepest decline since October 2023. Comparatively, year-over-year home sales fell by 1.1% and were down 21.5% from pre-pandemic figures.