Realtors are experiencing a significant increase in buyers backing out of home purchases as individuals become more selective in a challenging real estate market.
A recent report from Redfin highlighted that in June, nearly 56,000 home-purchase agreements were canceled, equating to 15% of all homes that entered into contracts 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, attributed this trend to more discerning buyers who are contending with high market prices. 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, another Redfin agent based in Miami, reported witnessing “nightmare scenarios,” including last-minute cancellations over minor details. In Miami alone, approximately 2,500 home purchases were called off in June, making up about 17.6% of homes that were under contract. Corrales emphasized that the main concern for buyers is affordability.
In June, the median home sale price reached a record high of $442,525, while the average rate on a 30-year mortgage rose to 6.92%. Coupled with elevated home prices and persisting high mortgage rates, potential home buyers are also facing challenges from increased costs related to insurance, property taxes, HOA fees, and other expenses associated with homeownership, all worsened by inflation.
The nationwide affordability crisis has led to the most substantial drop in home sales in eight months, according to Redfin. Home sales decreased by 0.5% month-over-month in June, marking the largest decline since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than levels observed before the pandemic.