Realtors are facing an increasing number of buyers backing out of home purchase agreements, as individuals become more selective in a challenging real estate market.
A recent report from Redfin revealed that nearly 56,000 agreements to buy homes were canceled in June, representing 15% of all homes that went 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, attributed the increase in canceled agreements to a more discerning buyer demographic who is struggling with 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.”
In Miami, Redfin agent Rafael Corrales reported witnessing “nightmare scenarios,” including last-minute cancellations over insignificant details. Last month, about 2,500 home purchases were canceled in Miami, equating to approximately 17.6% of homes that were under contract in June. Corrales highlighted the primary concern as affordability.
In June, the median home sale price reached an all-time high of $442,525, while the average rate for a 30-year mortgage stood at 6.92%. Potential buyers are further burdened by rising insurance, property taxes, HOA fees, and other homeownership costs that have been intensified by inflation.
The nationwide affordability crisis has led to a significant decline in home sales, marking the largest drop in eight months. According to Redfin, home sales decreased by 0.5% in June compared to the previous month, the steepest decline since October 2022. Year-over-year, home sales fell by 1.1%, leaving them 21.5% below pre-pandemic levels.