Realtors are facing an unprecedented number of buyers backing out of home purchases, as consumers become increasingly selective in a challenging real estate landscape.
According to a recent report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract that month. This reflects the highest percentage recorded for any June by Redfin.
Julie Zubiate, a Premier agent with Redfin in the San Francisco Bay Area, attributed this trend to buyers being more discerning and facing heightened costs in the current market. “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 explained.
In Miami, agent Rafael Corrales reported experiencing significant last-minute cancellations due to small concerns, with about 2,500 home purchases canceled last month, or roughly 17.6% of homes that were under contract. He pointed out that the primary challenge is affordability.
The median home sale price soared to a record $442,525 in June, with the average rate on a 30-year mortgage reaching 6.92%. Buyers are also contending with rising insurance costs, property taxes, homeowners’ association fees, and other expenses tied to homeownership, all of which have been compounded by inflation.
Nationwide affordability issues have led to the largest decline in home sales in eight months, as indicated by Redfin. Home sales decreased by 0.5% in June compared to the previous month, marking the most significant drop since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than pre-pandemic levels.