Realtors are experiencing an increase in buyers backing out of home purchases as the tough real estate market makes people more selective.
Nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract that month, according to a Redfin report. This is the highest percentage for any June on record.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the rise in buyer cold feet to a more discerning buyer market dealing with higher expenses.
“They’re backing out over minor issues because the monthly costs associated with buying a home today are just too high to justify not getting everything on their must-have list,” Zubiate said.
Rafael Corrales, another Redfin agent in Miami, has witnessed “nightmare scenarios” with last-minute cancellations over small details. About 2,500 home purchases were canceled in Miami last month, around 17.6% of homes that went under contract in June. Corrales noted that affordability remains the primary concern.
In June, the median home sale price reached a record $442,525, with the average 30-year mortgage rate at 6.92%. Alongside high home prices and mortgage rates, prospective buyers are also burdened by insurance, property taxes, HOA fees, and other costs exacerbated by inflation.
Nationwide affordability issues have led to the biggest decline in home sales in eight months. Home sales fell 0.5% in June, the largest drop since October 2023. On a yearly basis, home sales dipped 1.1% and were 21.5% below pre-pandemic levels.