Realtors are experiencing an unprecedented number of buyers backing out of home purchases, as many become more discerning in a challenging real estate market.
According to a recent Redfin report, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract that month, marking the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributed the increasing number of cancellations to buyers who are looking for more value in an expensive 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.”
Rafael Corrales, a Redfin agent in Miami, reported that he has encountered numerous “nightmare scenarios” resulting in last-minute cancellations over trivial matters. In Miami alone, approximately 2,500 home purchases were called off last month, representing about 17.6% of homes that went under contract in June. Corrales pointed out that the main challenge remains affordability.
In June, the median home sale price hit a record high of $442,525, with the average rate on a 30-year mortgage at 6.92%. In addition to the steep prices of homes, prospective buyers are also facing higher costs associated with insurance, property taxes, HOA fees, and other expenses related to homeownership, all of which have been worsened by inflation.
The national affordability crisis has led to a significant decline in home sales, which fell for the first time in eight months, as reported by Redfin. Monthly home sales decreased by 0.5% in June, the largest decline since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than pre-pandemic levels.