Realtors are experiencing an increasing number of buyers backing out of home purchases as the real estate market remains challenging. A recent report by Redfin revealed that nearly 56,000 home-purchase agreements were terminated in June, equating to 15% of all homes that were under contract that month. This marks the highest percentage recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributed this increase in withdrawals to buyers becoming more discerning in a market marked by high costs. She noted that buyers are more likely to back out over minor issues because the overall expenses related to buying a home are too significant to overlook, thus making it crucial for them to secure everything on their must-have list.
Rafael Corrales, another Redfin agent from Miami, shared his observations of “nightmare scenarios,” where buyers cancel deals at the last minute due to small details. In Miami alone, approximately 2,500 home purchases were canceled last month, representing around 17.6% of homes that went under contract in June. Corrales emphasized that affordability was a central concern driving these cancellations.
The median home sale price reached a record $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. In addition to the high home prices and elevated mortgage rates, potential buyers are also facing increased costs from insurance, property taxes, homeowners association fees, and other aspects of homeownership, all compounded by inflation.
This ongoing issue of affordability has led to a significant drop in home sales nationwide, with Redfin reporting the largest monthly decline in eight months. Home sales decreased by 0.5% in June, marking the biggest fall since October 2023, while year-over-year sales declined by 1.1%, sitting 21.5% below pre-pandemic levels.