Realtors are facing an unprecedented number of buyers backing out of home purchases, as a challenging real estate market makes prospective homeowners pickier than ever.
According to a report released by Redfin, nearly 56,000 home-purchase agreements, or 15% of all homes that went under contract in June, were abandoned. This marks the highest percentage of cancellations recorded for that month.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributes this increase in buyer cancellations to a more discerning clientele struggling with the current high costs of homeownership. She noted, “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.”
Rafael Corrales, another Redfin agent in Miami, reported encountering “nightmare scenarios,” with cancellations occurring over minor details. Last month, 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 concern remains affordability.
As of June, the median home sale price reached a record high of $442,525, with the average rate on a 30-year mortgage at 6.92%. In addition to soaring home prices and elevated mortgage rates, potential buyers are also facing increased insurance, property taxes, HOA fees, and other ownership-related expenses aggravated by inflation.
The worsening affordability crisis in the housing market has contributed to a notable decline in home sales nationwide, which experienced its most significant drop in eight months. Redfin reported a month-over-month decline of 0.5% in June, the largest decrease since October 2023, with year-over-year sales down 1.1% and 21.5% below pre-pandemic figures.