Realtors are facing an increasing number of buyers backing out of home purchase agreements, as a growing number of potential homeowners become more selective in a challenging real estate market.
According to a report from Redfin, nearly 56,000 home purchase agreements were canceled in June, representing 15% of all homes that went under contract that month—the highest percentage recorded for June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers being overwhelmed by the current market conditions. Many are choosing to walk away from deals over minor issues, as the high monthly expenses associated with home buying make them unwilling to compromise on their must-have lists.
Rafael Corrales, another Redfin agent based in Miami, reported experiencing “nightmare scenarios” where buyers cancel at the last minute due to trivial details. In Miami alone, around 2,500 home purchases were canceled in June, accounting for approximately 17.6% of homes that were under contract. Corrales emphasized that the primary concern is affordability.
The median home sale price hit a record high of $442,525 in June, accompanied by an average 30-year mortgage interest rate of 6.92%. Alongside the steep home prices and elevated mortgage rates, prospective buyers are also contending with increased costs from insurance, property taxes, homeowners association fees, and other expenses related to homeownership, all intensified by inflation.
The growing lack of affordability in the market nationwide has resulted in a significant decline in home sales, marking the largest drop in eight months, according to Redfin’s findings. Monthly home sales decreased by 0.5% in June—the most considerable fall since October 2023. Year-over-year, home sales declined by 1.1% and were reported to be 21.5% lower than pre-pandemic levels.