Realtors are facing an unprecedented wave of buyers backing out of home purchases as consumers become increasingly selective in a challenging real estate environment.
A recent report from Redfin revealed that nearly 56,000 home purchase agreements, representing 15% of all homes under contract in June, were canceled. This marks the highest cancellation rate recorded in any June since the data began.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed this trend to buyers’ heightened selectivity amid rising market costs. 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, another Redfin agent in Miami, described the situation as leading to “nightmare scenarios,” with last-minute cancellations often occurring over trivial details. In Miami alone, around 2,500 home purchases were called off last month, constituting about 17.6% of homes that had gone under contract in June. Corrales emphasized that the main challenge facing buyers is affordability.
In June, the median home sale price hit a record high of $442,525, accompanied by a 30-year mortgage interest rate averaging 6.92%. Aside from the elevated home prices and ongoing high mortgage rates, buyers are also contending with additional costs such as insurance, property taxes, and homeowners association fees, all of which have been amplified by inflation.
This lack of affordability has led to the steepest decline in home sales nationwide in eight months, according to Redfin. On a monthly basis, home sales dipped by 0.5% in June — the largest decrease since October 2023. Year-over-year, home sales fell by 1.1% and remain 21.5% below levels seen before the pandemic.