Realtors are facing an unprecedented number of buyers backing out of home purchases, as consumers become increasingly selective amid a challenging real estate market.
According to a recent report by Redfin, almost 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 recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the spike in cancellations to buyers becoming more discerning in an expensive housing 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, a Redfin agent in Miami, reported experiencing “nightmare scenarios” where small details have led to last-minute cancellations. In Miami alone, approximately 2,500 home purchases were called off last month, representing about 17.6% of the homes that were under contract in June. Corrales highlighted that the primary concern is affordability.
The median home sale price reached an all-time high of $442,525 in June, while the average rate on a 30-year mortgage climbed to 6.92%. Buyers are also facing challenges from rising costs associated with insurance, property taxes, HOA fees, and other expenses tied to homeownership, all intensified by inflation.
The nationwide affordability crisis has triggered the most significant decline in home sales in eight months, as reported by Redfin. Home sales decreased by 0.5% in June, marking the largest drop since October 2022. Year-over-year, home sales also fell 1.1%, remaining 21.5% below pre-pandemic levels.