Realtors are encountering an unprecedented number of buyers who are backing out of home purchases as a result of heightened selectivity amid a challenging real estate environment.
In June, nearly 56,000 home-purchase agreements were abandoned, representing 15% of all homes that went under contract that month. This figure marks the highest percentage recorded for any June, as reported by Redfin.
Julie Zubiate, a Redfin Premier real estate agent from the San Francisco Bay Area, attributes the increase in cancellations to more discerning buyers who are facing a more expensive housing market. She explained, “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.”
Similarly, Rafael Corrales, a Redfin agent in Miami, described experiencing “nightmare scenarios” with last-minute cancellations based on small details. In June, approximately 2,500 home purchases in Miami were canceled, accounting for around 17.6% of homes that went under contract. Corrales emphasized that the main concern for buyers is affordability.
The median home sale price reached a historic high of $442,525 in June, with the average interest rate for a 30-year mortgage hitting 6.92%. Coupled with elevated property values and mortgage rates, potential buyers are further burdened by rising insurance, property taxes, HOA fees, and other costs associated with homeownership that have intensified due to inflation.
The affordability crisis in the housing market nationwide has led to the most significant decline in home sales in eight months, as per Redfin’s analysis. Home sales fell by 0.5% from the previous month in June, marking the largest drop since October 2023. Year-over-year, sales decreased by 1.1%, and they are currently 21.5% lower than pre-pandemic levels.