Realtors are facing an increase in buyers backing out of home purchases as the real estate market becomes more challenging. According to a report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all contracts for that month, marking the highest percentage seen in June to date.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers being more selective amid rising costs. She noted that buyers are withdrawing from deals over minor concerns because the financial burden of homeownership is becoming increasingly significant.
Rafael Corrales, a Redfin agent based in Miami, described instances of “nightmare scenarios,” where last-minute cancellations were triggered by small issues. In Miami alone, approximately 2,500 home purchases were canceled in June, representing about 17.6% of contracts. Corrales highlighted that affordability remains the primary challenge for buyers.
In June, the median home sale price hit a record high of $442,525, while the average 30-year mortgage rate was 6.92%. Additionally, buyers are facing rising costs related to insurance, property taxes, HOA fees, and other homeownership expenses, all intensified by inflation.
This lack of affordability has led to the most significant decline in home sales in eight months, with a 0.5% decrease in June alone. Year-over-year, home sales dropped by 1.1%, and were 21.5% below levels recorded before the pandemic.