Realtors are experiencing a surge in buyers backing out of home purchase agreements, with a growing number of individuals becoming selective in a challenging real estate environment.
According to a recent report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract during that month, marking the highest cancellation rate recorded for June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in cancellations to a more discerning buyer demographic facing elevated market costs. She noted that buyers are withdrawing over minor issues, as the financial implications of purchasing a home today are significant, making it important to meet all their must-have requirements.
In Miami, Redfin agent Rafael Corrales reported numerous “nightmare scenarios” where buyers canceled deals at the last minute due to trivial concerns. Last month, approximately 2,500 home purchases were called off in Miami, representing about 17.6% of homes that went under contract in June. Corrales highlighted that the primary concern among buyers remains affordability.
In June, the median home sale price hit a record high of $442,525, with the average interest rate for a 30-year mortgage at 6.92%. Prospective buyers are also faced with additional expenses such as insurance, property taxes, and homeowners association fees, all of which have been intensified by inflation.
The ongoing affordability crisis in the housing market has contributed to a notable decline in home sales, with Redfin reporting the largest decrease in eight months. Home sales fell by 0.5% in June compared to the previous month, marking the steepest decline since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than levels observed before the pandemic.