Realtors are experiencing an unprecedented surge in buyers backing out of home purchases as increasing selectivity takes hold in a challenging real estate market.
According to a report from Redfin released on Tuesday, nearly 56,000 home-purchase agreements fell through in June, accounting for 15% of all homes under contract that month. This is the highest percentage recorded for any June since the site’s inception.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributed the rise in cancellations to buyers who are becoming more discerning in a costly market. “They’re backing out due to 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 commented.
Rafael Corrales, another Redfin agent in Miami, reported observing “nightmare scenarios,” including last-minute withdrawals over trivial details. In Miami alone, around 2,500 home purchases were canceled in June, representing approximately 17.6% of homes that had gone under contract. Corrales noted that the primary concern among buyers is affordability.
June saw the median home sale price soar to a record $442,525, with average rates for a 30-year mortgage reaching 6.92%. Alongside the high home prices and elevated mortgage rates, potential buyers are also facing rising costs associated with insurance, property taxes, homeowners’ association fees, and other ownership expenses that inflation has intensified.
This prevailing lack of affordability across the U.S. market has contributed to the most significant decline in home sales in eight months, as per the Redfin report. Monthly home sales experienced a 0.5% decrease in June, marking the largest drop since October 2023. When compared year-over-year, home sales fell by 1.1% and were 21.5% below pre-pandemic levels.