Realtors are witnessing an unprecedented number of buyers backing out of home purchase agreements as shoppers become more selective in a challenging real estate market.
In June alone, nearly 56,000 home-purchase agreements were canceled, accounting for 15% of all homes under contract for that month, according to a report from Redfin released on Tuesday. This marks the highest percentage recorded for any June in the history of the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed the increase in cancellations to buyers who are unwilling to compromise on their requirements amid high costs. “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,” she commented.
Rafael Corrales, a Redfin agent in Miami, described scenarios where buyers have pulled out at the last minute over minor details. His area reported approximately 2,500 cancellations in June, representing about 17.6% of homes that were under contract. He emphasized that the primary issue remains affordability.
As of June, the median home sale price reached a record high of $442,525, with the average 30-year mortgage rate at 6.92%. Combined with the high cost of homes, elevated mortgage rates, and additional expenses like insurance, property taxes, and homeowners association fees—further compounded by inflation—many potential buyers are finding the financial burdens overwhelming.
This widespread issue of affordability has contributed to a significant drop in home sales nationwide, marking the largest decline seen in eight months. According to Redfin, home sales decreased by 0.5% in June compared to the previous month, the steepest drop since October 2023. Additionally, sales fell by 1.1% year-over-year, representing a staggering 21.5% decline when compared to pre-pandemic levels.