Realtors are encountering an increasing number of buyers backing out of home purchases as consumers become more selective in a challenging real estate market.
According to a report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract that month. This marks the highest percentage recorded for any June by the real estate site.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in buyer hesitance to a more discerning clientele facing elevated market prices. “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 said.
In Miami, Redfin agent Rafael Corrales reported witnessing significant last-minute cancellations over trivial details, noting that approximately 2,500 home purchases were withdrawn in June, representing about 17.6% of homes that went under contract in the city. He emphasized that the primary concern for buyers remains affordability.
The median home sale price reached a record $442,525 in June, with the average interest rate on a 30-year mortgage at 6.92%. In addition to the high prices of homes, prospective buyers are facing additional financial burdens including insurance, property taxes, HOA fees, and other costs related to homeownership, all of which have been worsened by inflation.
The nationwide lack of affordability has led to the most significant decline in home sales in eight months, as reported by Redfin. Sales fell 0.5% in June compared to the previous month, marking the largest decrease since October 2023. Year-over-year, home sales have decreased by 1.1% and are 21.5% below pre-pandemic levels.