Realtors are facing a significant increase in buyers backing out of home purchases as prospective homeowners become more selective in a challenging real estate market.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements were abandoned in June, accounting for 15% of all homes that went under contract that month. This marks the highest percentage recorded for June on the platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributed the rise in cancellations to buyers who are now more discerning, struggling with the financial implications of high home prices. “They’re withdrawing due to minor issues because the monthly expenses associated with buying a home today are just too elevated to overlook any items on their must-have list,” Zubiate explained.
In Miami, agent Rafael Corrales reported experiencing “nightmare scenarios,” characterized by last-minute cancellations over trivial details. Last month, around 2,500 home purchases were called off in Miami, representing approximately 17.6% of homes that had gone under contract. Corrales highlighted that affordability remains the primary concern.
The median sale price of homes reached an all-time high of $442,525 in June, with the average interest rate on a 30-year mortgage at 6.92%. This, combined with soaring home prices, ongoing high mortgage rates, and additional costs such as insurance, property taxes, and homeowners association fees, has made homeownership increasingly challenging amid rising inflation.
This national affordability crisis has led to a significant decrease in home sales, marking the steepest drop in eight months, according to Redfin. Home sales fell by 0.5% in June compared to the previous month, representing the largest decline since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.