Realtors are increasingly facing a surge in buyers backing out of home purchases as consumers become more selective in a challenging real estate environment.
According to a Redfin report released on Tuesday, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract during the month. This marks the highest percentage for June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in cancellations to buyers who are now more discerning, struggling with a market that has become more expensive.
“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.
Rafael Corrales, a Redfin agent in Miami, described witnessing “nightmare scenarios,” including last-minute dropouts over trivial details. In Miami alone, approximately 2,500 home purchases were called off last month, representing about 17.6% of homes that were under contract in June. Corrales emphasized that the primary concern is affordability.
The median home sale price hit a record $442,525 in June, accompanied by an average mortgage rate of 6.92% for 30-year loans. Furthermore, prospective buyers are facing additional burdens from insurance, property taxes, homeowner association fees, and other costs linked to homeownership—all of which have intensified due to inflation.
This widespread lack of affordability nationally has led to a significant drop in home sales, marking the largest decline in eight months, as reported by Redfin. Home sales fell by 0.5% month-over-month in June, representing the most substantial decrease since October 2023. Year-over-year, home sales decreased by 1.1%, remaining 21.5% lower than pre-pandemic levels.