Realtors are facing an increasing number of buyers who are backing out of home purchases, as many individuals become more selective in a challenging real estate market.
According to a report from Redfin, approximately 56,000 home purchase agreements fell through in June, accounting for 15% of all homes that went under contract that month. This marks the highest percentage recorded in June by the real estate service.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the rise in cancellations to buyers being overly selective while navigating a higher-cost 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, a Redfin agent in Miami, reported encountering “nightmare scenarios” involving last-minute cancellations over minor details. Last month, around 2,500 home purchases were canceled in Miami, which is approximately 17.6% of homes that were under contract in June. Corrales emphasized that the main concern remains affordability.
In June, the median home sale price reached a record $442,525, with the average rate on a 30-year mortgage at 6.92%. Beyond the high prices of current listings and elevated mortgage rates, prospective buyers are also struggling with additional costs such as insurance, property taxes, homeowners association fees, and other expenses that have been intensified by inflation.
The nationwide affordability crisis has led to the most significant decline in home sales in eight months, according to Redfin. On a monthly basis, home sales fell by 0.5% in June, the largest drop since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% below pre-pandemic levels.