Realtors are experiencing an unprecedented number of buyers backing out of home purchase agreements, as consumers become increasingly selective in a challenging real estate environment.
In June, nearly 56,000 home-purchase agreements fell through, representing 15% of all homes that were under contract that month. This statistic marks the highest percentage recorded by Redfin for any June to date.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers becoming more discerning due to the high costs associated with home buying. “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,” Zubiate explained.
In Miami, agent Rafael Corrales described instances of last-minute cancellations due to minor details, noting that approximately 2,500 home purchases were canceled in June, which amounts to about 17.6% of homes that went under contract. While he acknowledged these issues, he highlighted that affordability remains the primary concern for buyers.
The median home sale price in June hit a record high of $442,525, with the average rate for a 30-year mortgage at 6.92%. Alongside these elevated home prices, buyers are also confronting rising costs such as insurance, property taxes, and homeowners association fees, all of which have been impacted by inflation.
Nationwide, the decrease in affordability has contributed to a significant drop in home sales, the most pronounced decline seen in eight months. Redfin’s data shows that home sales fell by 0.5% in June compared to the previous month, marking the largest decrease since October 2022. Year-over-year, home sales dipped by 1.1%, landing 21.5% below pre-pandemic levels.