Realtors are experiencing an increase in buyers backing out of home purchases, as individuals become more selective in a challenging real estate market.
A report from Redfin indicates that nearly 56,000 home-purchase agreements were canceled in June, equating to 15% of all homes that entered contracts that month. This marks the highest percentage recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes this trend to buyers feeling overwhelmed by high costs in the current market. “They’re backing out due to minor issues because the monthly costs associated with buying a home today are simply too high to justify not securing every item on their must-have list,” she explained.
In Miami, Redfin agent Rafael Corrales noted troubling last-minute cancellations over trivial matters, with around 2,500 home purchases canceled last month — representing approximately 17.6% of homes that went under contract in June. He pointed out that the primary concern remains affordability in the market.
In June, the median home sale price soared to a record $442,525, alongside an average interest rate of 6.92% for 30-year mortgages. This, coupled with ongoing high property values, mortgage rates, insurance, property taxes, and homeowners association fees has created a heavy financial burden for potential buyers, exacerbated by rising inflation.
The nationwide lack of affordability has led to the most significant decline in home sales in eight months, according to Redfin. Home sales fell by 0.5% in June compared to the previous month, marking the largest decrease since October 2023. Year-over-year, sales decreased by 1.1% and remained 21.5% lower than pre-pandemic levels.