Realtors are witnessing an increasing trend of buyers backing out of home purchases, as potential homeowners become more selective in the challenging real estate market.
A recent report from Redfin indicated that nearly 56,000 home-purchase agreements were abandoned in June, representing 15% of all contracts that month. This marks the highest cancellation rate recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in cancellations to buyers who are hesitant due to high monthly costs associated with purchasing a home. “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,” Zubiate explained.
In Miami, Redfin agent Rafael Corrales described “nightmare scenarios” resulting from last-minute cancellations over minor details, noting that about 2,500 home purchases were canceled in the area in June, which accounts for around 17.6% of homes that went under contract. He emphasized that the primary concern for buyers remains affordability.
The median home sale price reached a record high of $442,525 in June, accompanied by an average mortgage rate of 6.92% for a 30-year loan. In addition to elevated home prices and mortgage rates, potential buyers are facing rising costs related to insurance, property taxes, homeowner association fees, and other homeownership expenses, which have all been impacted by inflation.
Overall, these affordability issues have led to a significant decline in home sales across the nation. According to Redfin, home sales experienced a 0.5% decrease in June—the largest monthly drop since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than levels observed before the pandemic.