Realtors are facing an increasing number of buyers backing out of home purchases as consumers become more selective in a challenging real estate market.
A recent report from Redfin highlighted that nearly 56,000 home purchase agreements were canceled in June, representing 15% of all homes that went under contract that month. This marks the highest cancellation rate recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier realtor in the San Francisco Bay Area, noted that the rise in buyer hesitancy is due to the demands and pressures of a more expensive 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,” she explained.
Rafael Corrales, a Redfin agent in Miami, reported experiencing “nightmare scenarios” occurring, with last-minute cancellations often stemming from minor details. Last month, around 2,500 home purchases were canceled in Miami, amounting to about 17.6% of homes that were under contract. Corrales identified affordability as the primary concern for buyers.
The median home sale price hit a record high of $442,525 in June, while the average rate on a 30-year mortgage stood at 6.92%. With high home prices, elevated mortgage rates, and additional costs like insurance, property taxes, and HOA fees becoming more burdensome due to inflation, buyers are feeling the pinch.
This lack of affordability is impacting home sales nationwide, which saw their largest decline in eight months, according to Redfin. On a monthly basis, home sales dipped by 0.5% in June, marking the most significant drop since October 2023. Year-over-year, home sales decreased by 1.1% and were found to be 21.5% lower than pre-pandemic levels.