Realtors are facing an unprecedented increase in buyers backing out of home purchases, as many individuals become more discerning in a challenging real estate market.
A new report from Redfin reveals that 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 of cancellations recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to increasingly selective buyers who are confronted with a more expensive housing market. “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 commented.
In Miami, agent Rafael Corrales reported witnessing “nightmare scenarios,” including last-minute cancellations over trivial details. In June, approximately 2,500 home purchases were canceled in Miami alone, which accounted for about 17.6% of homes that went under contract that month. Corrales emphasized that the primary concern for buyers is affordability.
With the median home sale price hitting a record high of $442,525 in June and average mortgage rates for 30-year loans at 6.92%, potential buyers face significant financial pressure. Additional costs such as insurance, property taxes, HOA fees, and other expenses linked to homeownership have also surged due to inflation, complicating the buying process.
This lack of affordability is contributing to the most significant decline in home sales in the past eight months, according to Redfin. Monthly home sales decreased by 0.5% in June, marking the largest drop since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than pre-pandemic levels.