Realtors are facing an unprecedented number of buyers backing out of home purchases as increased selectivity emerges in a challenging real estate market.
According to a report from Redfin, nearly 56,000 home purchase agreements fell through in June, amounting to 15% of all homes that went under contract that month. This marks the highest rate recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the rise in cancellations to buyers who are more particular in a costly market. She noted, “They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to ignore without having everything on their must-have list.”
Rafael Corrales, a Redfin agent in Miami, reported experiencing “nightmare scenarios” with last-minute cancellations over minor details. In Miami alone, about 2,500 home purchases were canceled in June, representing approximately 17.6% of homes under contract that month. Corrales emphasized that the primary concern is affordability.
The median home sale price in June hit a record high of $442,525, with the average rate for a 30-year mortgage at 6.92%. In addition to high home prices and mortgage rates, potential buyers are facing additional challenges from increased insurance, property taxes, HOA fees, and other costs of homeownership, all worsened by inflation.
Nationwide affordability issues have led to the most significant drop in home sales in eight months, with Redfin reporting a monthly decrease of 0.5% in June—the largest since October 2023. Year-over-year, home sales saw a decline of 1.1%, standing at 21.5% below pre-pandemic levels.