Realtors are experiencing a surge in buyers backing out of home purchases, as consumers become increasingly selective in a challenging real estate environment.
A Redfin report released on Tuesday highlighted that nearly 56,000 home purchase agreements were canceled in June, accounting for 15% of all homes under contract that month. This represents the highest percentage for any June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed the increase in canceled contracts to a more discerning buyer profile confronted with a costly housing 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 noted.
Rafael Corrales, a Redfin agent based in Miami, described witnessing “nightmare scenarios,” with buyers canceling agreements over trivial details. In June, around 2,500 home purchases in Miami were called off, which correlates to approximately 17.6% of homes under contract in the area. Corrales emphasized that the primary concern is affordability.
The median home sale price reached a record $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. Coupled with elevated property prices and high mortgage rates, potential homebuyers are further burdened by insurance, property taxes, homeowners association fees, and other homeownership costs, all intensified by inflation.
The nationwide lack of affordability has led to a significant decline in home sales, as reported by Redfin. Home sales saw a 0.5% decrease in June, marking the largest decline since October 2023. Year-over-year, sales fell by 1.1%, and were 21.5% lower than levels observed before the pandemic.