Realtors are facing an increasing number of buyers backing out of home purchase agreements as consumers become more selective in a challenging real estate market. A report from Redfin revealed that in June, nearly 56,000 home-purchase contracts were terminated, accounting for 15% of all homes that went under contract that month. This figure represents the highest percentage recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed this trend to buyers who are hesitant to proceed due to high monthly costs associated with purchasing a home. She noted that minor issues are causing buyers to withdraw from deals as they prioritize ensuring their specific needs are met.
In Miami, agent Rafael Corrales reported experiencing “nightmare scenarios” where last-minute cancellations occur over trivial details. In June, approximately 2,500 home purchases were canceled in Miami, which equates to about 17.6% of homes that went under contract that month. Corrales emphasized that the primary obstacle buyers face is affordability.
The median home sale price in June hit a record of $442,525, while the average 30-year mortgage rate stood at 6.92%. In addition to high home prices and elevated mortgage rates, prospective buyers are contending with increased costs related to insurance, property taxes, and homeowners association (HOA) fees, all of which have been intensified by inflation.
As affordability challenges continue to plague the market across the nation, home sales saw their most significant decline in eight months, according to Redfin’s analysis. Month-over-month, home sales dropped by 0.5% in June, marking the most substantial decrease since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% below levels seen before the pandemic.