Realtors are experiencing an unprecedented number of buyers backing out of home purchases, as the competitive real estate market continues to push potential homeowners to be more selective. A report from Redfin reveals that nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes under contract for that month, marking the highest percentage recorded for June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this phenomenon to buyers becoming increasingly cautious and facing rising costs associated with home ownership. “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 noted.
In Miami, Redfin agent Rafael Corrales reported witnessing “nightmare scenarios,” where last-minute cancellations occur over trivial details. Last month, around 2,500 home purchases were canceled in Miami, accounting for approximately 17.6% of homes that went under contract in June. He emphasized that affordability remains the primary concern for buyers.
The median home sale price in June reached a record high of $442,525, with the average rate on a 30-year mortgage at 6.92%. In addition to high home prices and mortgage rates, prospective buyers are also facing increased expenses from insurance, property taxes, homeowner association fees, and other associated costs, all of which have been worsened by inflation.
This lack of affordability on a national scale has contributed to the most significant decline in home sales seen in the past eight months. According to Redfin, home sales fell by 0.5% in June compared to the previous month, marking the largest drop since October 2023. Year-over-year, home sales dipped by 1.1% and are now 21.5% below pre-pandemic levels.