Realtors are facing an unprecedented number of buyers backing out of home purchases, as individuals become increasingly selective in a challenging real estate market.
According to a report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract that month. This marks the highest percentage recorded for June by the real estate site.
Julie Zubiate, a Redfin Premier agent based in the San Francisco Bay Area, attributed the rise in cancellations to more discerning buyers who are contending with higher market prices. Zubiate 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.”
In Miami, Redfin agent Rafael Corrales described witnessing “nightmare scenarios,” including last-minute cancellations for minor details. Approximately 2,500 home purchases were cancelled in Miami last month, which accounts for around 17.6% of homes that went under contract in June. Corrales emphasized that affordability remains the biggest concern for many prospective buyers.
The median home sale price hit a record high of $442,525 in June, while the average rate for a 30-year mortgage was reported at 6.92%. In addition to the high costs of homes, potential buyers are facing additional financial burdens from insurance, property taxes, homeowners association fees, and various other expenses connected to homeownership, all of which have been worsened by inflation.
The decline in affordability across the nation has resulted in the most significant drop in home sales in eight months, as noted by Redfin. Home sales fell by 0.5% in June, marking the largest decrease since October 2023. Year-over-year, home sales fell by 1.1%, which is also a notable 21.5% lower than the levels seen before the pandemic.