Realtors are facing an increasing number of buyers backing out of home purchases, as prospective homeowners become more selective amidst 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 under contract for that month. This marks the highest percentage of cancellations recorded in June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in cancellations to buyers who are more discerning in light of escalating costs in the housing market. She noted that many buyers are withdrawing from deals over minor issues because the financial burdens associated with purchasing a home today are substantial.
Rafael Corrales, another Redfin agent in Miami, described some homebuying experiences as “nightmare scenarios,” where buyers have canceled agreements at the last minute due to trivial concerns. In Miami alone, approximately 2,500 home purchases were called off last month, accounting for about 17.6% of homes that went under contract in June. Corrales emphasized that the primary concern for many buyers is affordability.
The median home sale price hit a record high of $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. In addition to steep home prices and elevated mortgage rates, potential homebuyers face rising costs from insurance, property taxes, and homeowners’ association fees, all exacerbated by inflation.
The national affordability crisis has led to a notable decrease in home sales, which have experienced their largest drop in eight months, as reported by Redfin. Monthly home sales fell by 0.5% in June, marking the most significant decline since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic figures.