Realtors are facing an increasing number of buyers backing out of home purchases, as consumers become more selective in a challenging real estate market.
A report from Redfin revealed that nearly 56,000 home-purchase agreements were terminated in June, representing 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 agent in the San Francisco Bay Area, attributes the rise in cancellations to buyers’ heightened expectations amidst soaring market 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,” Zubiate stated.
In Miami, Redfin agent Rafael Corrales reported observing “nightmare scenarios,” including last-minute deal cancellations over insignificant details. In June alone, approximately 2,500 home purchases were canceled in Miami, accounting for about 17.6% of homes that went under contract. Corrales emphasized that the primary issue at hand is affordability.
The median home sale price reached an unprecedented $442,525 in June, with the average rate for a 30-year mortgage at 6.92%. Potential buyers are also struggling with additional financial burdens related to insurance, property taxes, and HOA fees, all of which have been intensified by inflation.
This decline in affordability has led to a significant drop in home sales across the nation, with Redfin reporting the most considerable decrease in eight months. Monthly home sales fell by 0.5% in June, marking the largest decline since October 2023. Year-over-year, home sales decreased by 1.1% and are now 21.5% below pre-pandemic figures.