Realtors are experiencing a surge in buyers backing out of home purchases, as consumers become increasingly selective in a challenging real estate market.
According to a report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract during that month. This marks the highest cancellation rate for June on record, highlighting the difficulties potential buyers are facing.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers being overwhelmed by the costs associated with purchasing a home. “They are stepping back due to minor issues because the monthly expenses tied to homeownership are simply too substantial to ignore without meeting all of their essential criteria,” she remarked.
Rafael Corrales, another Redfin agent based in Miami, noted “nightmare scenarios” unfolding, including last-minute pullouts over trivial matters. Last month, approximately 2,500 home purchases were canceled in Miami, representing about 17.6% of homes under contract in June. Corrales emphasized that the primary concern is affordability.
The median home sale price hit a record high of $442,525 in June, paired with an average 30-year mortgage rate of 6.92%. On top of high property prices and elevated mortgage rates, prospective buyers are grappling with additional costs, such as insurance, property taxes, and homeowners association dues, which have all been affected by rising inflation.
The national affordability crisis has contributed to a significant decline in home sales, which have seen their steepest drop in eight months, according to Redfin. Home sales fell by 0.5% in June—marking the largest monthly decrease since October 2022. Year-over-year, home sales declined by 1.1% and were recorded at 21.5% lower than pre-pandemic levels.