Realtors are facing an increase in buyers backing out of home purchases, with a growing trend of selectivity amid challenging conditions in the real estate market.
According to a report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes under contract during that month, marking the highest percentage for June recorded by the site.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed this trend to buyers being choosier as they navigate a more expensive housing market. 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.”
In Miami, Redfin agent Rafael Corrales highlighted troubling last-minute cancellations occurring over trivial concerns. Over 2,500 home purchases were canceled in the city last month, roughly 17.6% of homes that went under contract in June. However, Corrales indicated that the primary concern remains affordability.
The median home sale price reached a staggering $442,525 in June, with the average rate for a 30-year mortgage at 6.92%. The combination of elevated home prices, high mortgage rates, along with insurance, property taxes, HOA fees, and other homeownership costs, which have been driven up by inflation, is weighing heavily on potential buyers.
This affordability crisis has led to a significant drop in home sales nationwide, with Redfin reporting the largest decline in eight months. Home sales fell by 0.5% in June compared to the previous month, the steepest monthly decrease since October 2023. Year-over-year, home sales decreased by 1.1% and were down 21.5% compared to pre-pandemic levels.