Realtors are facing an increasing number of buyers backing out of home purchases, as potential homeowners become more selective in a challenging real estate market.
According to a report from Redfin, nearly 56,000 home purchase agreements were canceled in June, representing 15% of all homes that went under contract that month. This marks the highest percentage recorded for June by the real estate site.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in cancellations to buyers hesitating over minor issues, as the costs associated with home buying have become prohibitively high. “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 explained.
Rafael Corrales, another Redfin agent based in Miami, noted troubling trends, citing last-minute cancelations over small details. In Miami alone, approximately 2,500 home purchases were canceled last month, accounting for about 17.6% of homes that went under contract. However, Corrales highlighted affordability as the primary concern.
The median home sale price reached an all-time high of $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. In addition to elevated home prices and mortgage rates, potential buyers are also facing rising insurance costs, property taxes, HOA fees, and other expenses tied to homeownership, all further impacted by inflation.
The overall lack of affordability has led to a significant decline in home sales across the nation, with Redfin reporting that home sales fell 0.5% in June, marking the largest monthly decline since October 2023. Year-over-year, sales decreased by 1.1% and remained 21.5% below pre-pandemic levels.