Realtors are facing an increasing number of buyers backing out of home purchases, as potential homeowners become more selective in a challenging real estate market. A recent report from Redfin revealed that nearly 56,000 home purchase agreements were canceled in June, representing 15% of all homes that went under contract during that month. This marks the highest rate of cancellations recorded in June by the real estate website.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in cancellations to buyers being more discerning due to escalating costs associated with home purchases. She noted, “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.”
Rafael Corrales, another Redfin agent based in Miami, reported experiencing “nightmare scenarios” with last-minute cancellations over trivial details. In Miami alone, about 2,500 home purchases were canceled in June, accounting for approximately 17.6% of homes that went under contract. Corrales indicated that affordability remains the primary concern for buyers.
The median sale price for homes reached a record high of $442,525 in June, with the average 30-year mortgage rate at 6.92%. Alongside these elevated prices, prospective buyers are also facing increased costs from insurance, property taxes, HOA fees, and other expenses related to homeownership that inflation has worsened.
The nationwide affordability crisis has contributed to a significant decline in home sales, which saw their largest drop in eight months, according to Redfin. Home sales fell by 0.5% in June compared to the previous month, marking the steepest decline since October 2023. Year-over-year, home sales dropped by 1.1% and are currently 21.5% lower than pre-pandemic levels.