Realtors are experiencing a surge in buyers backing out of home purchases, as prospective buyers become increasingly selective in a challenging real estate market.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract that month. This marks the highest percentage of June cancellations ever recorded by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed this trend to buyers’ reluctance to commit due to rising costs. “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,” she stated.
Rafael Corrales, another Redfin agent based in Miami, reported experiencing “nightmare scenarios” with last-minute cancellations over small details. Approximately 2,500 home purchases were canceled in Miami last month, representing about 17.6% of homes that went under contract in June. Corrales emphasized that the primary concern remains affordability.
In June, the median home sale price hit a record of $442,525, with the average rate for a 30-year mortgage at 6.92%. Alongside elevated home prices and high mortgage rates, buyers are also contending with additional costs such as insurance, property taxes, HOA fees, and other expenses related to homeownership, which have been worsened by inflation.
The ongoing affordability crisis in the housing market across the nation has contributed to the steepest decline in home sales in eight months. According to Redfin, home sales fell by 0.5% in June, the largest monthly drop since October 2022. Year-over-year comparisons show a 1.1% decrease in home sales, which are now 21.5% lower than pre-pandemic levels.