Realtors are facing an increase in buyers backing out of home purchases as individuals become more selective in today’s challenging real estate market.
According to a report from Redfin published on Tuesday, nearly 56,000 home-purchase agreements were abandoned in June, accounting for 15% of all contracts signed that month. This marks the highest 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 surge in canceled purchases to buyers who have become picky, with many hesitating due to the high costs associated with homeownership. “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 described “nightmare scenarios” where buyers withdraw at the last minute over trivial matters. In June, approximately 2,500 home transactions were canceled in Miami, representing around 17.6% of homes that went under contract. Corrales emphasized that the primary concern is affordability.
The median home sale price reached a record $442,525 in June, while the average 30-year mortgage rate stood at 6.92%. Buyers are also confronted with elevated costs associated with homeownership, including insurance, property taxes, and HOA fees, all intensified by inflation.
This growing affordability crisis has led to a significant drop in home sales nationwide, with Redfin reporting the largest decline in eight months. Home sales decreased by 0.5% from May, marking the most substantial decline since October 2023. Additionally, there was a 1.1% year-over-year decrease in home sales, which were 21.5% lower than pre-pandemic levels.