Realtors are facing an increasing number of buyers backing out of home purchases as consumer preferences evolve in a challenging real estate landscape.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements were abandoned in June, accounting for 15% of all contracts that month. This marks the highest cancellation rate recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the uptick in buyer withdrawals to heightened selectivity in a pricier market. She noted that buyers are often reconsidering their commitments over minor issues, driven by the substantial monthly costs of homeownership that make it critical to fulfill their essential criteria.
In Miami, agent Rafael Corrales identified similar trends, describing instances of “nightmare scenarios” where last-minute cancellations occurred due to trivial concerns. Last month, approximately 2,500 home purchases were called off in Miami, translating to about 17.6% of homes that entered contracts. Corrales emphasized that the primary challenge is affordability.
June saw a median home sale price reach an unprecedented $442,525, while the average 30-year mortgage rate hit 6.92%. Along with the elevated home prices and persistent mortgage rates, potential buyers are grappling with additional financial burdens such as insurance, property taxes, HOA fees, and other costs linked to homeownership, all of which have been intensified by inflation.
This affordability crisis has led to a nationwide decline in home sales, marking the most significant drop in eight months, as reported by Redfin. In June, home sales declined by 0.5% month-over-month, the steepest decrease since October 2023. Year-over-year, sales fell by 1.1% and were 21.5% lower than pre-pandemic figures.