Real estate agents are facing an increasing number of buyers backing out of home purchase agreements, as many become more selective in a challenging market. A recent report from Redfin indicated that nearly 56,000 home purchase agreements were canceled in June, representing 15% of all homes that went under contract during that month. This marks the highest cancellation rate recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed this trend to buyers being more discerning due to the rising costs of homeownership. “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,” Zubiate stated.
Rafael Corrales, a Redfin agent in Miami, reported witnessing “nightmare scenarios” with buyers canceling at the last minute for trivial reasons. In Miami alone, around 2,500 home purchases were canceled in June, which constitutes about 17.6% of homes that entered contract. Corrales emphasized that the primary concern remains affordability.
In June, the median sale price of homes climbed to a record $442,525, while the average rate for a 30-year mortgage reached 6.92%. As buyers face high home prices and elevated mortgage rates, they are also contending with additional costs associated with homeownership, such as insurance, property taxes, and Homeowners Association fees, all of which have been impacted by inflation.
This lack of affordability has contributed to a significant decline in home sales nationwide, which experienced their largest decrease in eight months, according to Redfin. Home sales fell by 0.5% in June compared to the previous month, marking the steepest drop since October 2023. On an annual basis, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.