Realtors are experiencing an unprecedented number of buyers backing out of home-purchase agreements as consumers become increasingly selective in a challenging real estate market.
According to a report from Redfin released recently, 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.
Julie Zubiate, a premier real estate agent with Redfin in the San Francisco Bay Area, attributes the surge in cancellations to more discerning buyers who are struggling with elevated prices. 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 witnessing significant last-minute cancellations stemming from trivial details. In June alone, around 2,500 home purchases were rescinded in Miami, which constitutes approximately 17.6% of homes that went under contract. Corrales highlighted that the primary concern remains affordability.
In June, the median home sale price soared to a record $442,525, while the average rate for a 30-year mortgage reached 6.92%. Prospective buyers are also contending with rising costs related to insurance, property taxes, homeowners association fees, and other expenses tied to homeownership, all of which have been exacerbated by inflation.
The widespread lack of affordability has led to the most significant decline in home sales across the nation in eight months, as reported by Redfin. Home sales dropped by 0.5% in June compared to the previous month, marking the largest decrease since October 2023. Annually, home sales fell by 1.1% and were 21.5% lower than pre-pandemic figures.