Realtors are facing an unusual spike in buyers backing out of home purchases as individuals become more selective in what they want, particularly in a challenging real estate climate.
According to a report from Redfin, nearly 56,000 home purchase agreements were canceled in June, representing 15% of all homes that were put under contract during that month. This marks the highest cancellation rate recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier agent based in the San Francisco Bay Area, attributed this increase in cancellations to buyers being excessively choosy in light of elevated market expenses. “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,” Zubiate stated.
In Miami, Redfin agent Rafael Corrales reported numerous “nightmare scenarios,” including last-minute cancellations over trivial details. More than 2,500 home purchases were canceled in Miami last month, constituting approximately 17.6% of homes under contract in June. Corrales emphasized that the primary challenge lies in affordability.
The median sale price for homes reached a historic high of $442,525 in June, coinciding with an average rate of 6.92% for a 30-year mortgage. In addition to inflated home prices and high mortgage rates, potential buyers are contending with rising insurance costs, property taxes, HOA fees, and other expenses associated with homeownership—all intensified by inflation.
The struggle for affordability in the housing market has led to a significant decline in home sales nationwide, as reported by Redfin. In June, monthly home sales dipped by 0.5%, marking the most considerable decrease since October 2023. Year-over-year, home sales fell by 1.1% and were down 21.5% compared to levels before the pandemic.