Realtors are facing a significant increase in buyers backing out of home purchases as the housing market becomes increasingly competitive.
According to a recent report from Redfin, nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that went under contract that month. This marks the highest percentage recorded in June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in cancellations to a more discerning buyer base who is navigating an expensive market. She noted that buyers are more likely to withdraw from deals over minor concerns, as the steep monthly costs make it crucial for them to secure all items on their must-have list.
In Miami, Redfin agent Rafael Corrales reported witnessing “nightmare scenarios,” including last-minute cancellations over trivial details. In June, about 2,500 home purchases were canceled in Miami, amounting to approximately 17.6% of homes that went under contract. Corrales emphasized that the root issue remains affordability.
The median sale price for homes reached a record high of $442,525 in June, with the average interest rate on a 30-year mortgage at 6.92%. In addition to high home prices and mortgage rates, buyers are burdened by costs associated with insurance, property taxes, and homeowners’ association fees, all exacerbated by inflation.
This nationwide affordability crisis has resulted in the steepest decline in home sales in eight months, as reported by Redfin. Monthly home sales dipped by 0.5% in June, marking the largest decrease since October 2023. Year-over-year, the sales fell by 1.1% and were 21.5% lower than pre-pandemic levels.