Realtors are facing record numbers of buyers backing out of home purchases, as consumers grow more selective in a challenging real estate climate.
According to a report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of the homes that went under contract that month. This marks the highest percentage of cancellations recorded in June by the real estate firm.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributes the increase in cancellations to buyers being more discerning as they respond to the costs associated with home ownership in today’s market.
“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 stated.
Rafael Corrales, a Redfin agent in Miami, described witnessing what he called “nightmare scenarios,” with many buyers canceling at the last minute over minor details. In June, approximately 2,500 home purchases were canceled in Miami, accounting for about 17.6% of homes under contract. Corrales pointed out that affordability remains the primary concern for buyers.
The median home sale price reached an all-time high of $442,525 in June, with the average rate on a 30-year mortgage at 6.92%. Alongside these elevated home prices and mortgage rates, potential buyers are also contending with rising insurance, property taxes, HOA fees, and other ownership costs driven up by inflation.
This lack of affordability on a national scale has led to the most significant decline in home sales in the past eight months, as reported by Redfin. Home sales decreased by 0.5% in June compared to the previous month, marking the largest decline since October 2022. Year-over-year, home sales fell by 1.1%, and were 21.5% lower than levels prior to the pandemic.