Realtors are reporting an unprecedented number of buyers backing out of home purchases as consumers become increasingly selective in a challenging real estate market.
According to a Redfin report released Tuesday, nearly 56,000 home-purchase agreements were canceled in June, representing about 15% of all homes under contract that month. This marks the highest cancellation rate recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes this trend to buyers hesitating over minor issues, driven by the steep costs associated with purchasing a home. “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 explained.
Rafael Corrales, another Redfin agent from Miami, described “nightmare scenarios” with last-minute cancellations based on trivial details. In June, roughly 2,500 home purchases were canceled in Miami, accounting for approximately 17.6% of all homes that went under contract. Corrales highlighted that the primary concern remains affordability.
The median home sale price reached a record high of $442,525 in June, while the average interest rate for a 30-year mortgage stood at 6.92%. In addition to rising home prices and elevated mortgage rates, potential buyers are also facing increased burdens from insurance, property taxes, HOA fees, and other ownership-related costs that have been impacted by inflation.
This lack of affordability has contributed to the most significant decline in home sales in eight months, as reported by Redfin. Monthly home sales dropped by 0.5% in June, the largest decrease since October 2023. Year-over-year, sales fell by 1.1% and were 21.5% below pre-pandemic levels.