Realtors are facing an unprecedented number of buyers backing out of home purchase agreements, a trend influenced by heightened selectivity in a challenging real estate market.
According to a Redfin report released on Tuesday, nearly 56,000 home contracts fell through in June, representing 15% of all agreements made that month. This figure marks the highest cancellation percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this increase in cancellations to buyers’ heightened scrutiny in a market characterized by high costs. 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 based in Miami, recounted “nightmare scenarios” involving last-minute cancellations over trivial concerns. In Miami alone, approximately 2,500 home purchases were canceled in June, accounting for about 17.6% of contracts signed in the month. Corrales points out that the core issue remains affordability.
In June, the median home sale price reached a record high of $442,525, while the average rate for a 30-year mortgage stood at 6.92%. Prospective buyers today face added financial burdens from insurance, property taxes, homeowners association fees, and other costs linked to homeownership, which have all been amplified by inflation.
The ongoing affordability crisis in the housing market has led to a significant decline in home sales nationwide, with Redfin reporting a 0.5% monthly decrease in June—the most substantial drop since October 2023. Furthermore, year-over-year home sales fell by 1.1%, placing them 21.5% below pre-pandemic levels.