Realtors are encountering an increasing number of buyers backing out of home purchases, as potential homeowners become more selective in a challenging real estate market.
In June, nearly 56,000 home purchase agreements were terminated, accounting for 15% of all homes that went under contract that month, as reported by Redfin. This marks the highest percentage for any June recorded by the platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the surge in cancellations to buyers being more discerning amid rising costs in the housing market. 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 based in Miami, reported witnessing numerous cancellations over trivial details. Last month, approximately 2,500 home purchases were canceled in Miami alone, equating to about 17.6% of homes under contract in June. Corrales emphasized that the primary concern remains affordability.
The median home sale price hit a record high of $442,525 in June, with the average 30-year mortgage rate at 6.92%. Buyers are further burdened by rising costs associated with insurance, property taxes, Homeowners Association fees, and other expenses related to homeownership, which have been amplified by inflation.
The national affordability crisis has led to a significant decline in home sales, the largest in the past eight months, according to Redfin. Home sales dropped by 0.5% from May to June, marking the biggest decline since October 2023. Year-over-year, sales fell by 1.1% and were 21.5% below pre-pandemic figures.