Realtors are facing an increasing number of buyers backing out of home purchase agreements, as potential homeowners become more selective in a challenging real estate landscape.
A recent report from Redfin indicates that nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that entered contracts that month. This marks the highest percentage of cancellations recorded in June by the real estate site.
Julie Zubiate, a real estate agent with Redfin Premier in the San Francisco Bay Area, attributes this trend to buyers being more discerning while dealing with a rising market. “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, another Redfin agent based in Miami, mentioned encountering “nightmare scenarios,” with last-minute cancellations over trivial details. In Miami alone, approximately 2,500 home purchases were canceled last month, representing 17.6% of contracts. Corrales pointed out that the primary concern is affordability.
In June, the median home sale price reached a record high of $442,525, and the average rate for a 30-year mortgage was reported at 6.92%. Coupled with high home prices and elevated mortgage rates, potential buyers are also weighed down by additional costs such as insurance, property taxes, and HOA fees—all of which have been further strained by inflation.
The national housing market’s affordability crisis has led to the most significant decline in home sales in the last eight months, as reported by Redfin. Monthly sales fell by 0.5% in June, marking the largest drop since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% below pre-pandemic figures.