Realtors are experiencing an unprecedented number of buyers backing out of home purchases, as individuals become more selective in a challenging real estate market.
A recent report from Redfin highlights that nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract that month. This marks the largest cancellation rate recorded for June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in buyer retreats to a more discerning clientele facing steep market costs. 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.”
In Miami, Redfin agent Rafael Corrales observed “nightmare scenarios,” including last-minute cancellations for trivial reasons. In June alone, approximately 2,500 home purchases were canceled in Miami, constituting about 17.6% of homes that were under contract. Corrales emphasized that the primary concern remains affordability.
The median home sale price hit a new high of $442,525 in June, while the average 30-year mortgage rate was reported at 6.92%. Alongside these elevated prices, prospective buyers are facing additional financial burdens from insurance, property taxes, and homeowners association fees, all intensified by rising inflation.
This widespread lack of affordability has led to a significant decline in home sales nationwide, with Redfin reporting the largest fall in eight months. Home sales dropped by 0.5% in June compared to the previous month, the most considerable decline since October 2023. Year-over-year, home sales decreased by 1.1%, with current figures standing 21.5% lower than pre-pandemic levels.