Realtors are encountering an unprecedented number of buyers backing out of home purchases as preferences grow more selective in a challenging real estate landscape.
In June, nearly 56,000 home-purchase agreements were terminated, representing 15% of all homes that entered into contracts that month, according to a report from Redfin. This marks the highest percentage recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributes the increase in last-minute withdrawals to buyers who are becoming increasingly discerning amidst rising costs.
“They are withdrawing over minor concerns because the monthly expenses related to home buying today are so elevated that they feel the need to secure every item on their must-have list,” Zubiate noted.
Similarly, Rafael Corrales, a Redfin agent in Miami, reported witnessing challenging situations unfold, including last-minute cancellations triggered by trivial issues. In Miami alone, approximately 2,500 home purchases were canceled in June, equating to about 17.6% of homes that went under contract. However, Corrales believes affordability remains the principal concern.
The median home sale price reached a record high of $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. Alongside the steep prices of homes on the market, prospective buyers are also facing additional financial burdens from insurance, property taxes, Homeowners Association fees, and other ownership costs that have been impacted by inflation.
A nationwide lack of affordability has led to the most significant drop in home sales in eight months, according to Redfin. Month-over-month sales fell by 0.5% in June, marking the steepest decline since October 2023. Comparatively, home sales dropped 1.1% year-over-year, which is 21.5% below levels seen before the pandemic.