Realtors are facing an unprecedented number of buyers backing out of home purchases, as consumer preferences shift in a challenging real estate market.
According to a report by Redfin, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract during that month. This marks the highest percentage recorded for June by the platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increase in cancellations to buyers being more discerning 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 rationalize not getting everything on their must-have list.”
Rafael Corrales, a Redfin agent in Miami, echoed this sentiment, reporting “nightmare scenarios” including last-minute cancellations over trivial details. Last month, approximately 2,500 home purchases were called off in Miami, accounting for about 17.6% of homes under contract in June. Corrales highlighted that the primary issue remains affordability.
The median home sale price in June reached a record $442,525, with the average rate for a 30-year mortgage at 6.92%. In addition to the high cost of homes and elevated mortgage rates, potential buyers are facing increased financial burdens from insurance, property taxes, HOA fees, and other ownership costs that have been worsened by inflation.
The nationwide lack of affordability has led to the largest decline in home sales in eight months, as reported by Redfin. Month over month, home sales slipped 0.5% in June, marking the steepest decline since October 2023. On a year-over-year basis, sales dropped 1.1% and were 21.5% lower than pre-pandemic levels.