Realtors are facing a significant increase in buyers backing out of home purchases, as many people have become more selective due to challenging conditions in the real estate market.
According to a report from Redfin, nearly 56,000 home purchase agreements were canceled in June, accounting for 15% of all homes that went under contract that month. This marks the highest percentage recorded for any June by the real estate platform.
Julie Zubiate, a real estate agent with Redfin Premier in the San Francisco Bay Area, attributed this trend to buyers being more discerning and struggling with the high 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, described witnessing “nightmare scenarios,” including last-minute cancellations over trivial details. In Miami, around 2,500 home purchases were called off last month, representing about 17.6% of homes that were under contract in June. He emphasized that affordability is the primary concern for many buyers.
The median sale price of homes reached a record $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. In addition to high home prices and interest rates, prospective buyers are also burdened by increased costs related to insurance, property taxes, and homeowners association fees, all of which have been driven higher by inflation.
This widespread lack of affordability has led to a significant decline in home sales across the nation. Redfin reported that sales experienced their largest drop in eight months, with a monthly decrease of 0.5% in June, the most substantial decline since October 2023. Furthermore, year-over-year home sales fell by 1.1% and were 21.5% lower than pre-pandemic levels.