Realtors are facing an increasing number of buyers backing out of home purchases, as consumer expectations heighten in a challenging real estate landscape.
A report from Redfin reveals that nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all contracts signed that month. This marks the highest cancellation rate recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes this trend to buyers who are becoming more selective and struggling with escalating market prices. “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 explained.
Rafael Corrales, another Redfin agent based in Miami, has witnessed “nightmare scenarios,” including last-minute withdrawals over insignificant details. In Miami alone, around 2,500 purchases were canceled in June, accounting for approximately 17.6% of contracts. Corrales emphasizes that affordability remains the primary challenge.
The median sale price of homes reached a record $442,525 in June, coinciding with an average 30-year mortgage rate of 6.92%. Prospective buyers are further burdened by rising costs associated with insurance, property taxes, and homeowners association fees, all exacerbated by inflation.
Nationwide affordability issues have resulted in a substantial decrease in home sales, which saw their largest decline in eight months according to Redfin. Month-over-month, home sales fell by 0.5% in June—the sharpest drop since October 2022. Year-over-year, sales decreased by 1.1% and remained 21.5% below pre-pandemic levels.