Realtors are facing an increase in buyers backing out of home purchases, as individuals become more selective in a tough real estate environment.
A report from Redfin revealed that nearly 56,000 home-purchase agreements were terminated in June, equating to 15% of all homes that went under contract 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 rising cancellations to buyers who are focusing on their specific needs in a costly market. 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, a Redfin agent in Miami, reported experiencing “nightmare scenarios,” including last-minute cancellations over insignificant details. In Miami alone, around 2,500 home purchases were canceled last month, representing about 17.6% of homes under contract in June. Corrales indicated that the primary challenge is affordability.
In June, the median home sale price hit a record high of $442,525, with the average interest rate on a 30-year mortgage at 6.92%. Additional burdens such as insurance, property taxes, and homeowners association fees, compounded by inflation, are further weighing down potential buyers.
The overall lack of affordability nationally has led to the most significant drop in home sales in the past eight months, according to Redfin. Monthly home sales decreased by 0.5% in June, marking the most considerable decline since October 2023. Year-over-year, sales fell by 1.1% and remain 21.5% below pre-pandemic levels.