Realtors are encountering a significant number of buyers backing out of home purchases as consumers become more selective in a challenging real estate landscape.
A report from Redfin revealed that nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract that month, marking the highest cancellation rate recorded for June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increased cancellations to buyers’ growing list of demands amid rising costs. “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,” she noted.
In Miami, Redfin agent Rafael Corrales reported witnessing “nightmare scenarios” of last-minute cancellations over minor concerns, with approximately 2,500 home purchases canceled in June, amounting to about 17.6% of homes under contract. He emphasized that the primary issue remains affordability.
June saw the median home sale price reach a record $442,525, with the average rate on a 30-year mortgage at 6.92%. In addition to these steep costs, buyers are also grappling with rising insurance, property taxes, HOA fees, and other homeownership expenses intensified by inflation.
This affordability crisis has led to the most significant decline in home sales in eight months, according to Redfin. Home sales decreased by 0.5% month-over-month in June, the largest drop since October 2023. Year-over-year, sales fell by 1.1% and were down 21.5% compared to pre-pandemic levels.