Realtors are experiencing an increasing number of buyers backing out of home purchases, as individuals are becoming more selective in a challenging real estate landscape.
A report from Redfin revealed that nearly 56,000 home purchase agreements were canceled in June, translating to 15% of all homes under contract that month, marking the highest percentage for June recorded by the company.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed this trend to buyers who are hesitant due to the high costs associated with purchasing a home. “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, noted similar challenges, reporting numerous last-minute cancellations over trivial details. In June, approximately 2,500 home purchases were withdrawn in Miami, representing about 17.6% of homes that went under contract. Corrales pointed out that the main concern is affordability.
The median home sale price hit a new high of $442,525 in June, alongside an average 30-year mortgage rate of 6.92%. Prospective buyers face not only elevated home prices and mortgage rates but also mounting costs related to insurance, property taxes, HOA fees, and other homeownership expenses that inflation has further intensified.
The national lack of affordability has led to a significant decrease in home sales, the most notable drop in eight months, as reported by Redfin. On a month-to-month basis, home sales fell by 0.5% in June, the largest decline since October 2023. Comparatively, year-over-year home sales decreased by 1.1%, which is 21.5% lower than pre-pandemic figures.