Realtors are facing an unprecedented number of buyers backing out of home purchases, as prospective homeowners become increasingly selective in a challenging real estate climate.
A report from Redfin revealed that nearly 56,000 home-purchase agreements were terminated in June, representing 15% of all homes placed under contract that month—the highest rate recorded for June by the real estate site.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed this trend to buyers being more discerning, struggling to navigate an expensive 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 stated.
In Miami, Redfin agent Rafael Corrales described witnessing “nightmare scenarios,” with last-minute cancellations often occurring over trivial details. Approximately 2,500 home purchases were canceled in Miami last month, amounting to 17.6% of homes that went under contract in June. Corrales emphasized that the primary challenge remains affordability.
The median sale price for homes reached an all-time high of $442,525 in June, while the average rate for a 30-year mortgage hit 6.92%. Coupled with these elevated home prices and ongoing high mortgage rates, buyers are also contending with additional expenses related to insurance, property taxes, HOA fees, and other costs of homeownership that have been influenced by inflation.
This widespread lack of affordability has contributed to a significant downturn in home sales across the nation, marking the largest decline in eight months, as per Redfin. Month-over-month, home sales decreased by 0.5% in June—the most considerable drop since October 2023. Year-over-year, sales fell by 1.1% and were 21.5% lower than pre-pandemic figures.