Realtors are facing an increase in buyers backing out of home purchases, with a growing number of individuals becoming more selective during a challenging real estate market.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements fell through in June, accounting for 15% of all homes that went under contract that month. This marks the highest percentage for any June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed the increase in cancellations to buyers who are choosing to be more particular about their purchases, driven by high monthly costs. She noted that “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, described some “nightmare scenarios,” including last-minute cancellations over small details. In Miami, approximately 2,500 home purchases were canceled last month, representing about 17.6% of homes under contract in June. Corrales emphasized that the main issue for potential buyers is affordability.
In June, the median home sale price reached an all-time high of $442,525, with the average rate on a 30-year mortgage at 6.92%. In addition to the elevated home prices and persistent mortgage rates, buyers are also faced with additional costs such as insurance, property taxes, and homeowner association fees, all of which have been impacted by inflation.
This lack of affordability has resulted in a significant decline in home sales nationwide, with Redfin reporting the biggest decrease in eight months. Month-over-month, home sales fell by 0.5% in June, marking the largest drop since October 2023. On an annual basis, sales dipped by 1.1% and were 21.5% below pre-pandemic levels.