Realtors are experiencing a surge in buyers backing out of home purchases, as potential homeowners become more selective in a challenging real estate market.
According to a Redfin report released on Tuesday, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that were under contract during 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, attributed the increase in canceled deals to buyers who are more discerning and facing 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 rationalize not getting everything on their must-have list,” Zubiate explained.
In Miami, Redfin agent Rafael Corrales reported witnessing significant cancellations over minor details, with around 2,500 home purchases canceled last month—approximately 17.6% of homes under contract in June. Corrales highlighted affordability as the primary concern for many buyers.
The median home sale price hit a record $442,525 in June, coupled with an average 30-year mortgage rate of 6.92%. With these elevated housing costs and persistent mortgage rates, prospective buyers are also contending with additional expenses such as insurance, property taxes, and homeowners association fees, all of which have been amplified by inflation.
This widespread lack of affordability has resulted in one of the most substantial declines in home sales in eight months, according to Redfin. Home sales fell by 0.5% in June compared to the previous month, marking the largest decline since October 2023. Year-over-year, home sales dropped by 1.1% and remain 21.5% below pre-pandemic levels.