Realtors are facing a significant increase in buyers backing out of home purchases as preferences become more selective in a challenging real estate climate.
According to a recent report from Redfin, nearly 56,000 home-purchase agreements were terminated in June, accounting for 15% of all homes that were under contract that month. This marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers becoming more discerning as they navigate an expensive market. She noted that many are canceling deals over minor issues because the costs associated with purchasing a home have risen to levels that make them unwilling to compromise on their must-have lists.
Rafael Corrales, a Redfin agent in Miami, reported observing “nightmare scenarios” where buyers back out at the last minute due to trivial details. In Miami alone, approximately 2,500 home purchases were canceled last month, representing about 17.6% of homes that were under contract in June. He highlighted that the primary concern is affordability.
The median home sale price reached an all-time high of $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. Prospective buyers are further burdened by additional costs, including insurance, property taxes, and homeowners’ association fees, all of which have been aggravated by inflation.
The challenge of affordability across the nation has led to the largest decline in home sales in eight months, as reported by Redfin. Monthly sales decreased by 0.5% in June, marking the steepest decline since October 2023. Year-over-year, home sales fell by 1.1% and are now 21.5% lower than pre-pandemic levels.