Realtors are experiencing an unprecedented number of buyers backing out of home purchases, with many becoming more selective in a challenging real estate market.
According to a report from Redfin released Tuesday, nearly 56,000 home-purchase agreements were canceled in June, amounting to 15% of all homes that went under contract that month. This marks the highest percentage of canceled agreements ever recorded in June by the real estate site.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes this trend to buyers being increasingly discerning, as they navigate the costly housing market. “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,” said Zubiate.
In Miami, Redfin agent Rafael Corrales reported experiencing “nightmare scenarios,” where buyers cancel deals at the last minute over trivial details. In June alone, around 2,500 home purchases were called off in Miami, representing approximately 17.6% of homes that were under contract. Corrales highlighted affordability as the principal challenge facing buyers.
The median home sale price in June reached a record high of $442,525, while the average interest rate for a 30-year mortgage stood at 6.92%. Along with these elevated prices, potential buyers are contending with additional costs such as insurance, property taxes, homeowners association (HOA) fees, and other expenses associated with homeownership, all of which have been worsened by inflation.
The widespread affordability issues have resulted in the sharpest decline in home sales in the past eight months, Redfin reported. Month-over-month, home sales saw a decrease of 0.5% in June, the largest drop since October 2023. Year-over-year, sales decreased by 1.1%, remaining 21.5% below levels seen before the pandemic.