Realtors are facing an unprecedented number of buyers backing out of home purchases, as individuals become more selective in the current challenging real estate market.
According to a report by Redfin, nearly 56,000 home-purchase agreements canceled in June, amounting to 15% of all homes that were under contract during that month. This marks the highest percentage recorded for any June in the site’s history.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this increase in canceled deals to buyers who are more discerning in a costly market. She explained that many are pulling out over minor issues, as the monthly costs tied to homeownership are significant, making it hard to forgo essential items from their wish list.
Miami-based Redfin agent Rafael Corrales echoed these sentiments, noting “nightmare scenarios” involving last-minute cancellations over trivial details. In June, around 2,500 home purchases were called off in Miami, reflecting approximately 17.6% of homes that went under contract. Corrales highlighted that the predominant concern remains affordability.
The median home sale price reached a historic high of $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. The overall costs of homeownership are compounded by insurance, property taxes, HOA fees, and other expenses, all of which have been worsened by inflation.
This widespread lack of affordability has led to a significant decline in home sales nationwide, according to Redfin. On a month-to-month basis, home sales fell by 0.5% in June, marking the largest decrease since October 2023. Year-over-year, home sales decreased by 1.1% and were down 21.5% compared to pre-pandemic figures.