Realtors are facing an unprecedented number of buyers backing out of home purchases, as individuals become more selective in a challenging real estate market.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements fell through in June, constituting 15% of all homes under contract that month. This is the highest percentage recorded for any June by the real estate service.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed the rise in cancellations to a more discerning buyer population, struggling with the expensive market landscape. She noted, “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.”
Rafael Corrales, a Redfin agent in Miami, mentioned experiencing “nightmare scenarios,” with last-minute withdrawals occurring over minor details. In Miami alone, approximately 2,500 home purchases were canceled last month, representing around 17.6% of homes that were under contract in June. He pointed out that the overarching issue remains affordability.
The median home sale price hit a record $442,525 in June, with the average rate for a 30-year mortgage at 6.92%. Coupled with the high costs of homes, ongoing elevated mortgage rates, and additional expenses like insurance, property taxes, and homeowners’ association fees—many of which have risen due to inflation—prospective buyers are increasingly troubled by the overall financial burden of homeownership.
This lack of affordability has led to the most significant decline in home sales seen in eight months, as reported by Redfin. Month-to-month sales dropped by 0.5% in June, marking the largest decline since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic figures.