Realtors are experiencing an increase in buyers backing out of home purchase agreements, as individuals become more selective in a challenging real estate market.
According to a report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract during the month. This marks the highest percentage recorded for June by the real estate site.
Julie Zubiate, a Redfin Premier real estate agent from the San Francisco Bay Area, attributed the rise in cancellations to buyers being more discerning in a costly 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 based in Miami, noted that he has observed “nightmare scenarios,” including last-minute cancellations over trivial details. Approximately 2,500 home purchases were canceled in Miami last month, amounting to about 17.6% of homes that went under contract. Corrales indicated that the primary concern for buyers is affordability.
The median home sale price reached a record $442,525 in June, while the average rate for a 30-year mortgage was 6.92%. In addition to the high home prices and persistent mortgage rates, potential buyers are also facing challenges from insurance, property taxes, HOA fees, and other costs associated with homeownership, all of which have been amplified by inflation.
The nationwide affordability crisis has led to the largest decline in home sales in eight months, according to Redfin. Home sales fell by 0.5% in June compared to the previous month, marking the most significant drop since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.