Realtors are facing an increase in buyers backing out of home purchases as more individuals become selective in a challenging real estate environment.
A recent report from Redfin revealed that nearly 56,000 home purchase agreements were terminated in June, accounting for 15% of all homes that had gone under contract that month. This marks the highest percentage recorded for any June by the real estate platform.
Julie Zubiate, a real estate agent with Redfin in the San Francisco Bay Area, attributed the surge in cancellations to buyers who are being more discerning amidst rising housing costs. She noted that buyers are withdrawing from agreements over minor issues because the financial implications of buying a home are too significant to ignore if they don’t get everything on their wish list.
Rafael Corrales, another Redfin agent in Miami, shared that he has encountered “nightmare scenarios,” including last-minute cancellations due to small details. In Miami alone, around 2,500 home purchases were called off last month, representing approximately 17.6% of homes that went under contract in June. Corrales emphasized that the primary concern for buyers is affordability.
The median home sale price hit a record high of $442,525 in June, with the average interest rate for a 30-year mortgage reaching 6.92%. In addition to high property prices and elevated mortgage rates, potential buyers are challenged by increased costs from insurance, property taxes, HOA fees, and other expenses associated with homeownership that have escalated due to inflation.
This affordability crisis has led to a significant decrease in home sales across the nation, with Redfin reporting the largest decline in eight months. Home sales fell by 0.5% in June compared to the previous month, marking the biggest drop since October 2023. Year-over-year, home sales decreased by 1.1% and are now 21.5% lower than pre-pandemic levels.