Realtors are facing an increasing number of buyers backing out of home purchase agreements, as consumer expectations rise in a challenging real estate environment. According to a report from Redfin, nearly 56,000 home-purchase deals collapsed in June, accounting for 15% of all homes under contract that month. This marks a record high percentage for June, highlighting an urgent trend in the market.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed this rise in cancellations to buyers becoming more discerning while navigating a costly market. She noted that buyers are more hesitant, often withdrawing from deals due to minor issues. “The monthly costs linked to home purchases are simply too significant to ignore, leading buyers to insist on all their must-have items,” Zubiate explained.
Rafael Corrales, a Redfin agent in Miami, echoed these sentiments, reporting “nightmare scenarios” where buyers canceled deals at the last minute over minor details. In Miami alone, about 2,500 home purchases were called off in June, which represents roughly 17.6% of homes that were under contract.
The escalating challenges stem from a record median home sale price of $442,525 in June, coupled with an average 30-year mortgage rate of 6.92%. Prospective buyers are also grappling with rising insurance costs, property taxes, HOA fees, and other expenses associated with homeownership, which are being intensified by inflation.
Nationwide, the decreasing affordability has led to a significant drop in home sales, marking the largest decline in eight months, as reported by Redfin. On a monthly basis, home sales saw a 0.5% decrease in June, the steepest fall since October 2023. Year-over-year, home sales declined by 1.1% and were 21.5% lower than pre-pandemic figures.