Realtors are experiencing an unprecedented number of buyers backing out of home purchases, as increased selectiveness amidst a challenging real estate environment becomes the norm.
In June alone, nearly 56,000 home-purchase agreements were abandoned, representing 15% of all homes that went under contract during that month. This figure marks the highest percentage of cancellations for any June documented by Redfin.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the surge in buyer hesitance to a more discerning audience facing rising costs in the housing market. She noted that buyers are willing to walk away from deals over minor issues, primarily because the mounting monthly expenses associated with homeownership are difficult to justify if they are not meeting all their critical requirements.
In Miami, Redfin agent Rafael Corrales described various “nightmare scenarios,” including last-minute pullouts over trivial matters. He reported that around 2,500 home purchases were canceled in Miami in June, constituting about 17.6% of homes that entered contracts. Corrales pointed out that the core issue remains affordability.
The median sale price for homes reached a record high of $442,525 in June, alongside an average 30-year mortgage rate of 6.92%. In addition to elevated home prices, prospective buyers are contending with rising insurance costs, property taxes, HOA fees, and other financial burdens associated with homeownership, all of which have been worsened by rising inflation.
This decline in market affordability has contributed to the most significant drop in home sales in the past eight months, as reported by Redfin. Month-over-month, home sales decreased by 0.5% in June—the largest drop since October 2023. Year-over-year, the sales fell by 1.1% and remained 21.5% lower than levels seen before the pandemic.