Realtors are facing an increasing number of buyers who are backing out of home purchases, as prospective homeowners grow more selective in a challenging real estate market.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements were abandoned in June, accounting for 15% of all homes that went under contract that month. This marks the highest rate for June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers being more discerning, driven by the steep costs associated with homeownership. “They’re backing out due to minor issues because the monthly costs of buying a home today are just too high to justify not getting everything on their must-have list,” she explained.
Rafael Corrales, another Redfin agent in Miami, noted that he has witnessed numerous last-minute cancellations over trivial matters. 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 reached a record high of $442,525 in June, while the average 30-year mortgage rate stood at 6.92%. In addition to these elevated home prices and still-high mortgage rates, potential buyers are also facing various other costs related to home ownership, such as insurance, property taxes, and HOA fees, all of which have been further strained by inflation.
The ongoing affordability crisis has led to a significant drop in home sales nationwide, with Redfin reporting the most considerable decline in eight months. Month-over-month, home sales decreased by 0.5% in June, marking the largest fall since October 2023. Compared to the same period last year, home sales fell by 1.1%, sitting at 21.5% below pre-pandemic levels.