Realtors are encountering an unprecedented level of buyers backing out of home purchases, as consumers become increasingly selective amid a challenging real estate landscape.
According to a recent report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all contracts that month. This represents the highest percentage of cancellations recorded in June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the trend to buyers more cautious about the expenses associated with home buying in today’s market. “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 remarked.
In Miami, fellow Redfin agent Rafael Corrales reported experiencing “nightmare scenarios” where buyers canceled deals at the last moment over trivial details. In June, approximately 2,500 home purchases were canceled in Miami, representing about 17.6% of the homes that had gone under contract. Corrales emphasized that affordability remains the primary concern for home buyers.
The median sale price for homes hit a record $442,525 in June, with the average 30-year mortgage rate at 6.92%. Alongside high home prices and mortgage rates, buyers are also facing additional costs such as insurance, property taxes, and homeowners’ association fees, all of which have been intensified by inflation.
This lack of affordability has contributed to a notable decline in home sales across the country, marking the largest drop in eight months as reported by Redfin. Month-over-month, sales decreased by 0.5% in June, the most significant decline since October 2023. Year-over-year, home sales dipped by 1.1% and were 21.5% lower than pre-pandemic levels.