Realtors are experiencing a surge in buyers backing out of home purchases, as potential homeowners become more discerning in the current challenging real estate landscape.
A recent report from Redfin indicates that nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that were under contract that month. This marks the highest cancellation rate recorded for any June by the real estate company.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to a more selective buyer demographic facing higher market prices. She noted, “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.”
Rafael Corrales, another Redfin agent in Miami, reported experiencing “nightmare scenarios” where buyers canceled last-minute for trivial reasons. In Miami alone, approximately 2,500 home purchases were canceled in June, representing about 17.6% of homes that were under contract. Corrales highlighted that the primary concern for buyers is 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%. In addition to elevated home prices and persistent mortgage rates, buyers are also burdened by rising insurance costs, property taxes, HOA fees, and the overall expenses tied to homeownership, all intensified by inflation.
This decline in affordability has led to a significant drop in home sales nationwide, marking the largest decrease in eight months according to Redfin. Home sales fell by 0.5% month-over-month in June, the steepest decline since October 2023. Year-over-year, home sales saw a decrease of 1.1% and were down 21.5% from pre-pandemic levels.