Real estate agents are experiencing a surge in buyers backing out of home purchases, with many becoming increasingly selective in a challenging market. A recent report from Redfin revealed that nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract that month. This marks 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, attributed this trend to buyers who are hesitant to finalize purchases due to the mounting costs associated with home buying. She noted, “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, agent Rafael Corrales reported that he has witnessed “nightmare scenarios” where buyers have backed out at the last minute over small details. Last month, approximately 2,500 home sales were canceled in Miami, equating to about 17.6% of homes that were under contract. Corrales emphasized that the primary concern for buyers remains affordability.
In June, the median home sale price reached an unprecedented $442,525, while the average interest rate on a 30-year mortgage hit 6.92%. Beyond the steep home prices and elevated mortgage rates, homebuyers are also contending with additional costs such as insurance, property taxes, and HOA fees, which have all been affected by inflation.
This lack of affordability has resulted in a significant decline in home sales nationwide, with Redfin reporting the largest drop in eight months. Home sales fell by 0.5% in June compared to the previous month — marking the steepest decline since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.