Realtors are facing a growing trend of buyers backing out of home purchases as selectivity increases in a challenging real estate market. A recent report from Redfin revealed that nearly 56,000 home purchase agreements fell through in June, amounting to 15% of all contracts signed that month, marking the highest percentage for June in the site’s history.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed the uptick in cancellations to buyers who are becoming more discerning amidst soaring costs. She noted, “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.”
In Miami, agent Rafael Corrales described seeing “nightmare scenarios,” where clients cancel deals over small details. Approximately 2,500 home purchases were called off in Miami last month, representing about 17.6% of homes that entered contract in June, with affordability being the primary concern.
The median home sale price hit a record $442,525 in June, alongside an average 30-year mortgage rate of 6.92%. High home prices and mortgage rates are compounded by additional costs such as insurance, property taxes, and homeowners association fees, all of which have risen due to inflation.
Consequently, the nationwide lack of affordability has led to a notable decline in home sales, the largest drop in eight months as reported by Redfin. Home sales fell by 0.5% in June, the steepest decline since October 2023, and experienced a year-over-year decrease of 1.1%, which represents a 21.5% drop compared to pre-pandemic figures.