Realtors are experiencing a surge in buyers backing out of home purchases as consumers become increasingly selective amidst a challenging real estate environment. A recent report from Redfin notes that nearly 56,000 home-purchase agreements were terminated in June, representing 15% of all homes that went under contract during the month. This marks the highest recorded percentage for any June on the real estate platform.
According to Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, buyers are often withdrawing due to minor concerns, as the monthly expenses related to home buying are now seen as too significant to overlook. “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, another Redfin agent from Miami, recounted witnessing distressing situations, including last-minute cancellations over trivial details. In Miami alone, approximately 2,500 home purchases were canceled last month, equivalent to about 17.6% of homes that went under contract in June. Corrales emphasized that the primary concern remains affordability.
The median home sale price reached a historic $442,525 in June, with the average interest rate on a 30-year mortgage at 6.92%. In addition to the high price of homes, potential buyers face significant burdens from rising insurance rates, property taxes, HOA fees, and other homeownership-related costs, all intensified by inflation.
This nationwide affordability issue has led to a significant decline in home sales, which have experienced their largest dip in eight months, according to Redfin. On a monthly basis, home sales decreased by 0.5% in June—the most substantial decline since October 2023. Year-over-year, home sales fell by 1.1% and remained 21.5% below pre-pandemic levels.