Realtors are observing an increasing number of buyers walking away from home purchase agreements, as consumer preferences evolve in a challenging real estate environment.
According to a recent Redfin report, nearly 56,000 home purchase agreements, or 15% of all homes under contract in June, were abandoned, marking the highest percentage for that month on record.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the rise in buyer cancellations to heightened selectivity in a pricey 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,” she explained.
In Miami, Redfin agent Rafael Corrales reported distressing scenarios, including last-minute deal cancellations over trivial concerns. Approximately 2,500 home purchases were canceled in Miami during June, accounting for about 17.6% of that month’s contracts. Corrales noted that the main hurdle remains affordability.
The median home sale price reached an unprecedented $442,525 in June, with a 30-year mortgage average rate hitting 6.92%. Along with soaring home prices, prospective buyers are facing the added burden of higher insurance, property taxes, HOA fees, and other homeownership costs, all intensified by inflation.
The nationwide affordability crisis has led to the most significant dip in home sales in eight months, as reported by Redfin. Home sales fell by 0.5% in June on a monthly basis, representing the largest decline since October 2022. Comparatively, year-over-year home sales decreased by 1.1%, and were 21.5% lower than pre-pandemic figures.