Realtors are facing an unprecedented number of buyers backing out of home purchases as individuals become more discerning in a challenging real estate environment.
According to a recent report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all contracts signed during that month. This marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a real estate agent with Redfin in the San Francisco Bay Area, attributes this surge in cancellations to buyers who are increasingly selective and struggling with a tough 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 explained.
Rafael Corrales, another Redfin agent based in Miami, reported having witnessed “nightmare scenarios,” including last-minute pullouts over minor details. In Miami alone, around 2,500 home purchases were canceled last month, which accounts for roughly 17.6% of homes that went under contract in June. Corrales emphasized that the core issue remains affordability.
The median home sale price hit a record high of $442,525 in June, alongside an average 30-year mortgage rate of 6.92%. In addition to steep home prices and elevated mortgage rates, potential buyers are contending with rising costs from insurance, property taxes, homeowners association fees, and other expenses tied to homeownership, all intensified by inflation.
This widespread lack of affordability has led to a notable downturn in home sales across the nation, marking the steepest decline in eight months, as per Redfin’s findings. Home sales fell by 0.5% in June relative to the previous month—the largest drop since October 2023. Year-over-year, home sales experienced a 1.1% decrease, landing 21.5% below levels seen before the pandemic.