Realtors are facing an unprecedented number of buyers backing out of home purchases amid a challenging real estate market, according to a Redfin report. In June, nearly 56,000 home-purchase agreements were abandoned, representing 15% of all homes that went under contract that month. This marks the highest percentage recorded for June by Redfin.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed the increase in cancellations to buyers being more selective in a market characterized by high costs. She explained that potential homeowners are backing out over minor issues because the overall monthly expenses of buying a home are increasingly difficult to justify without fulfilling their entire wish list.
Rafael Corrales, a Redfin agent in Miami, described troubling scenarios where buyers canceled purchases at the last minute over trivial matters. In Miami alone, around 2,500 purchases were canceled in June, amounting to approximately 17.6% of homes that went under contract. According to Corrales, the core issue remains affordability.
The median home sale price hit a record high of $442,525 in June, with the average 30-year mortgage rate at 6.92%. Along with elevated home prices and persistent mortgage rates, buyers are contending with additional costs such as insurance, property taxes, and HOA fees, all of which have been intensified by inflation.
The nationwide affordability crisis has led to the most significant decline in home sales in eight months. According to Redfin, home sales fell 0.5% in June compared to the previous month—the largest drop since October 2023. Year-over-year, home sales decreased by 1.1% and were down 21.5% compared to pre-pandemic levels.