Realtors are experiencing an unprecedented number of buyers backing out of home purchases as individuals become more selective in a challenging real estate environment.
According to a recent report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that entered contracts that month. This represents the highest cancellation rate recorded for any June in the site’s history.
Julie Zubiate, a real estate agent with Redfin Premier in the San Francisco Bay Area, attributes this increase in cancellations to buyers who are more discerning amid rising market costs. “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,” she noted.
Rafael Corrales, another Redfin agent based in Miami, echoed this sentiment, stating he has observed troubling trends, including last-minute cancellations over trivial matters. Last month, around 2,500 home sales were abandoned in Miami, representing about 17.6% of homes under contract in June. Corrales emphasized that the primary concern remains affordability.
The median home sale price surged to a record $442,525 in June, while the average rate for a 30-year mortgage rose to 6.92%. In addition to high housing prices and elevated mortgage rates, prospective buyers are also facing increased burdens from insurance, property taxes, homeowners association fees, and other homeownership costs that have been intensified by inflation.
This widespread lack of affordability across the nation has led to a significant decrease in home sales, marking the largest drop in eight months, according to Redfin. Home sales fell by 0.5% in June compared to the previous month — the most substantial monthly decline since October 2022. Year-over-year figures showed a 1.1% decrease in home sales, with sales being 21.5% below pre-pandemic levels.