Realtors are facing an increasing number of buyers who are backing out of home purchase agreements, as potential homeowners become more selective in a challenging real estate market.
According to a report from Redfin released on Tuesday, nearly 56,000 home purchase agreements were canceled in June, representing 15% of all homes that went under contract that month. This marks the highest percentage recorded for any June by the real estate platform.
Real estate agent Julie Zubiate from the San Francisco Bay Area attributed the increase in cancellations to buyers being more discerning in the face of high 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Rafael Corrales, a Redfin agent in Miami, described troubling situations where buyers rescinded offers due to small details. Approximately 2,500 home purchases were canceled in Miami last month, accounting for about 17.6% of homes under contract in June. Corrales pointed out that the primary concern remains affordability.
The median home sale price reached an all-time high of $442,525 in June, while the average rate for a 30-year mortgage hit 6.92%. Alongside rising home prices and elevated mortgage rates, potential buyers are also contending with additional expenses such as insurance, property taxes, and homeowners association fees, which 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. Home sales decreased by 0.5% in June, marking the largest drop since October 2023. Year-over-year, sales fell by 1.1% and were 21.5% below pre-pandemic levels.