Realtors are facing an increasing number of buyers backing out of home purchases amid a challenging real estate landscape.
According to a report from Redfin, nearly 56,000 home purchase agreements, representing 15% of all contracts signed in June, were canceled, marking the highest rate ever recorded for that month.
Julie Zubiate, a real estate agent with Redfin in the San Francisco Bay Area, attributes this phenomenon to buyers becoming more selective as they navigate 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,” Zubiate explained.
In Miami, agent Rafael Corrales reported experiencing “nightmare scenarios,” with last-minute cancellations driven by small details. In June, approximately 2,500 home purchases were canceled in Miami, constituting about 17.6% of contracts. Corrales noted that the core issue is affordability.
The median sale price for homes surged to a record $442,525 in June, alongside an average mortgage rate of 6.92% for 30-year loans. Prospective buyers are encountering significant challenges due to elevated home prices, persistent mortgage rates, and additional costs like insurance, property taxes, and homeowners association fees, all of which have been intensified by inflation.
Nationwide, the affordability crisis has prompted the largest decline in home sales in eight months, according to Redfin. Monthly home sales dipped by 0.5% in June, the steepest drop since October 2022. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.