Realtors are encountering an increasing number of buyers who are backing out of home purchases, as consumers become more selective in a challenging real estate environment.
According to a recent Redfin report, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that were under contract that month. This figure represents the highest percentage recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in canceled deals to buyers who are hesitant due to rising costs in the market. She noted that buyers are backing out over minor issues since the monthly expenses associated with homeownership have become difficult to justify.
In Miami, Redfin agent Rafael Corrales reported experiencing “nightmare scenarios” where last-minute cancellations occurred due to trivial matters. Approximately 2,500 home purchases were scrapped in Miami last month, which equates to about 17.6% of homes that went under contract in June. Corrales emphasized that affordability remains the primary concern.
In June, the median home sale price reached a historic high of $442,525, with the average rate on a 30-year mortgage at 6.92%. Additionally, prospective buyers face challenges from rising costs associated with insurance, property taxes, homeowner association fees, and other expenses related to homeownership, all intensified by inflation.
The nationwide lack of affordability has led to the largest decline in home sales in eight months, according to Redfin. Monthly home sales experienced a decline of 0.5% in June, marking the biggest drop since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.