Realtors are facing an unprecedented number of buyers backing out of home purchases as the real estate market becomes increasingly challenging.
In June, nearly 56,000 home-purchase agreements, or 15% of all homes that went under contract, fell through, marking the highest rate for June recorded by Redfin.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers becoming more selective in a pricey market. “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 based in Miami, reported experiencing “nightmare scenarios” with last-minute cancellations over trivial matters. In Miami alone, around 2,500 home purchases were canceled last month, representing about 17.6% of homes that went under contract in June. Corrales emphasized that the principal concern is affordability.
The median home sale price hit a record high of $442,525 in June, with the average 30-year mortgage rate at 6.92%. Prospective buyers are also grappling with rising costs from insurance, property taxes, and homeowners association fees, all of which have been amplified by inflation.
The ongoing affordability crisis in the housing market has led to the most significant decline in home sales nationwide in eight months, according to Redfin. Home sales dipped by 0.5% in June compared to the previous month, marking the largest decrease since October 2023. Compared to the previous year, home sales fell by 1.1% and are now 21.5% below pre-pandemic levels.