Realtors are facing an unprecedented surge in buyers backing out of home purchases, as potential homeowners become increasingly selective in a challenging real estate environment.
A recent report from Redfin revealed that nearly 56,000 purchase agreements were abandoned in June, representing 15% of all homes that went under contract during that month. This marks the highest cancellation rate for June recorded by the platform.
Julie Zubiate, a real estate agent with Redfin in the San Francisco Bay Area, attributes this trend to buyers who are hesitant to move forward due to the high monthly costs associated with homeownership. “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, reported seeing similar situations where buyers cancel at the last minute over minor details. In Miami alone, around 2,500 home purchases were called off in June, which accounts for approximately 17.6% of homes that were under contract. Corrales emphasized that the main concern for buyers is affordability.
In June, the median sale price of homes reached a record high of $442,525, while the average interest rate for a 30-year mortgage was 6.92%. In addition to elevated home prices and persistent mortgage rates, buyers are also grappling with rising insurance costs, property taxes, homeowners association fees, and other expenses intensified by inflation.
This affordability crisis across the nation has led to the most significant decline in home sales in eight months, according to Redfin. Month-over-month, home sales fell by 0.5% in June, marking the largest decrease since October 2023. Year-over-year, sales dipped by 1.1%, and they remain 21.5% below levels seen before the pandemic.