Realtors are witnessing an unprecedented number of buyers backing out of home purchase agreements, as more people become selective in a challenging real estate market.
According to a recent Redfin report, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract that month. This marks the highest percentage recorded for any June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in buyer hesitance to the high costs associated with home purchases. “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 explained.
Rafael Corrales, another agent with Redfin based in Miami, reported experiencing challenging situations, including last-minute cancellations over trivial matters. In June, roughly 2,500 home purchases were called off in Miami, representing about 17.6% of the homes that went under contract. Corrales noted that the primary concern for buyers is affordability.
The median home sale price reached a new high of $442,525 in June, with the average rate for a 30-year mortgage at 6.92%. Furthermore, potential home buyers are confronted with rising costs from insurance, property taxes, homeowner association fees, and other expenses related to homeownership, which have been intensified by inflation.
The affordability crisis across the nation has led to a significant decline in home sales, marking the steepest drop in eight months, as per Redfin’s findings. Month-over-month, home sales decreased by 0.5% in June, the largest decline since October 2023. Year-over-year, sales fell by 1.1% and were 21.5% lower than pre-pandemic figures.