Realtors are facing an unprecedented number of buyers backing out of home purchases, as consumers grow more selective amid challenging market conditions.
In June, nearly 56,000 home purchase agreements were terminated, representing 15% of all homes that went under contract that month, according to a report from Redfin released on Tuesday. This marks the highest cancellation percentage recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this increase to buyers who are being more discerning amid rising costs. “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, another Redfin agent in Miami, reported experiencing “nightmare scenarios” where last-minute cancellations occur over trivial matters. In Miami alone, approximately 2,500 home purchases were canceled in June, equating to about 17.6% of homes that had gone under contract. He emphasized that affordability remains the primary concern for buyers.
The median home sale price reached a record high of $442,525 in June, while the average rate for a 30-year mortgage was 6.92%. Alongside the expensive homes, buyers are also burdened by additional costs including insurance, property taxes, and HOA fees, all of which have been intensified by inflation.
This lack of affordability has led to the most significant decline in home sales across the nation in eight months, as reported by Redfin. Month-over-month, home sales dropped by 0.5% in June, the largest decrease since October 2023. Year-over-year, sales fell by 1.1%, which is 21.5% lower than levels before the pandemic.