Realtors are facing an unprecedented wave of buyers backing out of home purchases as individuals become increasingly selective in a challenging real estate market.
A recent report from Redfin indicates that nearly 56,000 home-purchase agreements were canceled in June, marking 15% of all homes that went under contract that month. This represents the highest cancellation rate recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers being more discerning as they navigate a costly 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.”
In Miami, Redfin agent Rafael Corrales reported observing “nightmare scenarios,” including last-minute cancellations over trivial matters. Approximately 2,500 home purchases were scrapped in Miami last month, accounting for 17.6% of contracts that were signed in June. Corrales emphasized that the primary concern for buyers is affordability.
The median home sale price reached a staggering $442,525 in June, with the average interest rate on a 30-year mortgage hitting 6.92%. Coupled with the steep prices of homes and high mortgage rates, potential homebuyers are also facing mounting expenses from insurance, property taxes, HOA fees, and other costs of homeownership, all intensified by inflation.
This lack of affordability has led to a significant decline in home sales nationwide, with Redfin reporting the largest decrease in eight months. Home sales fell by 0.5% from the previous month in June, the steepest decline since October 2023. Year-over-year, home sales decreased by 1.1% and were recorded at 21.5% below pre-pandemic levels.