Realtors are facing an unprecedented number of buyers backing out of home purchases as consumers grow increasingly selective in a challenging real estate environment.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements were canceled in June alone, representing 15% of all homes that went under contract during that month. This marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in cancellations to buyers who are now more discerning, struggling to navigate a tough financial landscape. “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 in Miami, highlighted some troubling scenarios where buyers canceled last-minute over trivial details. In Miami, about 2,500 home purchases were called off last month, equating to 17.6% of homes that entered into contract in June. Corrales emphasized that the overarching problem is affordability.
In June, the median sale price of a home hit a record $442,525, with the average rate for a 30-year mortgage at 6.92%. Alongside steep home prices and elevated mortgage rates, potential buyers are also facing increased costs from insurance, property taxes, and homeowners’ association fees, all of which have been impacted by inflation.
This widespread affordability crisis has led to the largest decline in home sales nationwide in eight months, as reported by Redfin. Month-over-month, home sales decreased by 0.5% in June, marking the most significant drop since October 2023. Year-over-year, home sales fell by 1.1%, standing at 21.5% lower than levels prior to the pandemic.