Realtors are experiencing an increase in buyers backing out of home purchases, as individuals become more selective in a challenging real estate market.
A recent report from Redfin reveals that nearly 56,000 home-purchase agreements were terminated in June, representing 15% of all homes that went under contract during that month. This marks the highest percentage recorded in any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to a more discerning buyer who is facing the realities of an expensive 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,” explained Zubiate.
In Miami, Rafael Corrales, another Redfin agent, noted that he has witnessed “nightmare scenarios” involving last-minute cancellations over trivial details. Approximately 2,500 home purchases were canceled in Miami last month, constituting about 17.6% of homes that were under contract in June. Corrales pointed out that the main concern for buyers is the issue of affordability.
The median home sale price reached an all-time high of $442,525 in June, while the average interest rate for a 30-year mortgage stood at 6.92%. In addition to high home prices and elevated mortgage rates, potential buyers are also challenged by insurance, property taxes, HOA fees, and other costs of homeownership that inflation has further intensified.
This lack of affordability has led to a significant decline in home sales nationwide, which experienced their largest drop in eight months, according to Redfin. Month-over-month, home sales decreased by 0.5% in June—the steepest decline since October 2023. Year-over-year, sales fell by 1.1% and were down 21.5% compared to pre-pandemic levels.