Realtors are experiencing a significant surge in buyers backing out of home purchases, as consumer preferences shift in the challenging real estate landscape.
In June, nearly 56,000 home-purchase agreements were canceled, representing 15% of all homes that entered into contracts that month, according to a recent report from Redfin. This marks the highest rate of cancellations ever recorded for June by the platform.
Julie Zubiate, a Redfin Premier agent based in the San Francisco Bay Area, attributed many of these cancellations to buyers becoming increasingly selective in a market that has become more expensive. “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,” she noted.
Rafael Corrales, another Redfin agent in Miami, reported witnessing troubling scenarios, including last-minute cancellations over minor details. In Miami alone, about 2,500 home purchases were canceled last month, equating to around 17.6% of homes that went under contract in June. Corrales pointed out that affordability remains the critical concern for buyers.
The median sale price for homes hit a record high of $442,525 in June, while the average interest rate for a 30-year mortgage stood at 6.92%. Alongside the high home prices and mortgage rates, prospective buyers are also facing escalating costs such as insurance, property taxes, and homeowners association fees, all of which have been intensified by inflation.
The ongoing affordability crisis has led to a significant drop in home sales nationwide, marking the steepest decline in the last eight months. Monthly home sales dipped by 0.5% in June, the largest decrease since October 2023. Additionally, year-over-year comparisons show a 1.1% decrease in home sales, which are now 21.5% lower than pre-pandemic levels.