Realtors are experiencing an increase in buyers backing out of home purchases as consumers become more selective in a challenging real estate environment.
In June, nearly 56,000 home-purchase agreements were canceled, representing 15% of all homes that went under contract that month, according to a report by Redfin. This marks 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’ rising expectations amidst a costly market. “They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to justify not getting everything on their must-have list,” she noted.
Rafael Corrales, a Redfin agent based in Miami, described seeing “nightmare scenarios,” including last-minute cancellations over trivial details. In Miami alone, around 2,500 home purchases were canceled last month, accounting for approximately 17.6% of contracts in June. Corrales emphasized that the primary concern is affordability.
The median home sale price reached a record high of $442,525 in June, with the average 30-year mortgage rate at 6.92%. In addition to elevated home prices and mortgage rates, potential buyers face increased expenses related to insurance, property taxes, homeowners association fees, and other costs exacerbated by inflation.
The nationwide affordability crisis has resulted in the largest decline in home sales in eight months, as reported by Redfin. Home sales experienced a monthly drop of 0.5% in June, the most significant decrease since October 2023, and a year-over-year decline of 1.1%, which is 21.5% lower than pre-pandemic levels.