Realtors are experiencing an increase in buyers withdrawing from deals as people become more selective in a challenging real estate market.
Nearly 56,000 home-purchase agreements were terminated in June, representing 15% of all homes that went under contract that month, according to a report by Redfin. This marks the highest percentage recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increased cancellations to buyers being more discerning due to the high costs of the current market.
“Buyers are backing out over minor issues because the monthly costs of homeownership today are too high to justify settling for anything less than their full wish list,” Zubiate explained.
In Miami, Redfin agent Rafael Corrales reported “nightmare scenarios” where buyers canceled at the last minute over small details. Approximately 2,500 home purchases were canceled in Miami last month, accounting for about 17.6% of homes that went under contract in June. Corrales pointed out that affordability is the primary concern.
The median home sale price hit a record $442,525 in June, with the average rate on a 30-year mortgage at 6.92%. Beyond high home prices and mortgage rates, prospective buyers are also contending with costs such as insurance, property taxes, and HOA fees, all of which have been impacted by inflation.
Nationwide, the lack of affordability has led to the largest decline in home sales in eight months, according to Redfin. Home sales decreased by 0.5% in June compared to the previous month, marking the largest monthly drop since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% below pre-pandemic levels.