Realtors are experiencing an unprecedented number of buyers backing out of home purchase agreements as buyers become increasingly discerning 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 of cancellations for any June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the surge in cancellations to a more selective buyer demographic facing high market 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, a Redfin agent based in Miami, reported experiencing “nightmare scenarios” where deals fell through due to small details. In Miami alone, approximately 2,500 home purchases were canceled last month, accounting for roughly 17.6% of homes that entered into contracts in June. Corrales emphasized that the primary concern remains affordability.
The median home sale price reached a record high of $442,525 in June, with the average 30-year mortgage rate at 6.92%. In addition to the steep prices for homes, potential buyers are also facing significant burdens from insurance, property taxes, and HOA fees, along with rising inflation impacting overall homeownership costs.
This widespread affordability issue across the nation has led to a significant decline in home sales, the largest in eight months, according to Redfin. Monthly home sales decreased by 0.5% in June, marking the biggest drop since October 2023. Year-over-year statistics show a 1.1% decline, with sales 21.5% lower than pre-pandemic levels.