Realtors are experiencing a significant increase in buyers backing out of home purchases, as consumers become more selective in a challenging real estate market. In June, nearly 56,000 home-purchase agreements were canceled, representing 15% of all homes that went under contract that month. This marks the highest percentage recorded for June by the real estate platform Redfin.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers re-evaluating their options in light of rising costs in the housing market. “They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to justify not getting everything on their must-have list,” she explained.
In Miami, Redfin agent Rafael Corrales noted similar concerns, citing “nightmare scenarios” where buyers cancel at the last minute over minor details. Last month, approximately 2,500 home purchases were abandoned in Miami, equating to 17.6% of the contracts signed in June. Corrales pointed out that the primary concern among buyers is affordability.
The median home sale price hit a record high of $442,525 in June, with the average rate on a 30-year mortgage reaching 6.92%. In addition to the elevated home prices and mortgage rates, prospective buyers are further burdened by rising costs encompassing insurance, property taxes, HOA fees, and other expenses, all worsened by inflation.
Nationwide affordability issues have led to a notable decline in home sales, with Redfin reporting the most significant decrease in eight months. Home sales fell by 0.5% from the previous month, marking the steepest drop since October 2023. Compared to the same month last year, home sales dropped by 1.1% and were 21.5% lower than pre-pandemic levels.