Realtors are experiencing an unprecedented number of buyers backing out of home purchases, as individuals are becoming increasingly selective in the challenging real estate environment.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all contracts formed that month. This figure marks the highest percentage ever recorded for the month of June by the real estate website.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributed the increase in buyer withdrawals to a more discerning clientele contending with a costly housing market. 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 operating in Miami, shared experiences of “nightmare scenarios” where last-minute cancellations were triggered by trivial concerns. In Miami, approximately 2,500 home purchases were canceled last month, amounting to about 17.6% of homes that were under contract in June. Corrales emphasized that the primary challenge remains affordability.
In June, the median home sale price hit a record high of $442,525, while the average interest rate on a 30-year mortgage reached 6.92%. In addition to the steep home prices and persistent mortgage rates, potential buyers are also facing rising costs from insurance, property taxes, HOA fees, and other homeownership expenses that have been intensified by inflation.
This widespread lack of affordability has led to the most significant drop in home sales nationwide in eight months, as reported by Redfin. Monthly sales fell by 0.5% in June, marking the largest decline since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.