Realtors are facing an unprecedented number of buyers backing out of home purchases, as consumer expectations heighten in the current challenging real estate market.
A Redfin report released this week indicates that nearly 56,000 home-purchase agreements were canceled in June, amounting to 15% of all homes that had gone under contract that month. This represents the highest cancellation rate recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributes the increased cancellations to buyers being overly selective amid rising costs. She stated, “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, Redfin agent Rafael Corrales has noted “nightmare scenarios” where buyers have canceled purchases at the last minute over minor details. He reported that around 2,500 agreements were scrapped in Miami in June, representing approximately 17.6% of homes that went under contract. Corrales pointed out that the core issue is affordability.
In June, the median home sale price surged to a record $442,525, while the average rate for a 30-year mortgage hit 6.92%. In addition to high home prices and elevated mortgage rates, potential buyers are facing increased costs related to insurance, property taxes, homeowner association fees, and other expenses, all of which have been intensified by inflation.
This lack of affordability has led to the most significant decline in home sales in eight months, according to Redfin. Month-over-month, home sales decreased by 0.5% in June—the most considerable fall since October 2023. Year-over-year, there was a decline of 1.1%, with sales 21.5% lower than pre-pandemic levels.