Realtors are experiencing a significant increase in buyers backing out of home purchases as individuals become more selective in a challenging real estate environment.
According to a recent report from Redfin, nearly 56,000 home-purchase agreements collapsed in June, equating to 15% of all homes that were under contract that month. This marks the highest percentage recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes the uptick in cancellations to buyers being more discerning due to the high costs associated with homeownership. “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 stated.
In Miami, Redfin agent Rafael Corrales has witnessed “nightmare scenarios,” including last-minute withdraws triggered by small details. Approximately 2,500 home purchases were canceled in the Miami area last month, representing around 17.6% of homes that went under contract in June. Corrales emphasized that the primary concern for buyers is affordability.
The median home sale price hit a record of $442,525 in June, while the average rate for a 30-year mortgage was 6.92%. Prospective buyers are also burdened by rising costs related to insurance, property taxes, homeowners association fees, and other expenses that have been worsened by inflation.
This widespread lack of affordability has led to a noticeable decline in home sales across the country, with Redfin reporting the most significant decrease in eight months. Home sales fell by 0.5% in June compared to the previous month, marking the largest drop since October 2023. Year-over-year, home sales fell by 1.1% and remained 21.5% below pre-pandemic levels.